VAT on Private School Fees: A Policy Born Over a Pint?

This morning, while listening to Nick Ferrari on LBC, I found myself frustrated—again—by the government's proposal to impose VAT on private school fees. Ferrari was discussing the topic in the wake of recent demonstrations, with even school unions calling for a delay. And it made me wonder: how did we end up with such a rushed and flawed policy? It feels like an idea born over a pint in the pub, which somehow morphed into nationwide policy without any feasibility study or even basic common sense.

As a father of an 8-year-old boy who attends private school, thanks to the financial support of his grandfather, I see firsthand the critical role these schools play, particularly for children with learning challenges that the public sector simply can't support. My son’s educational needs would go unmet without the resources provided by his private school. While I recognise how fortunate we are, many parents aren’t as lucky—and they’re now contemplating everything from remortgaging their homes to relocating abroad just to secure the right education for their children.

The Maths Doesn't Add Up

Beyond the emotional toll this is taking on parents, the financial figures backing this VAT proposal simply don’t make sense. The government expects to raise ￡1.5 billion annually by adding 20% VAT to private school fees. However, the reality is more complex. Around 130,000 students—approximately 20% of those currently attending private schools—would likely be forced into the already overstretched state sector. This shift alone would cost an estimated ￡400 million a year. When you consider the long-term strain on public resources and the other associated costs, the supposed financial benefits begin to evaporate.

Unintended Consequences

And it doesn’t stop there. Many private schools may look for legal ways to avoid paying VAT altogether. According to a report from Tax Policy Associates , schools could restructure into charitable or quasi-charitable entities, significantly reducing the revenue the government is counting on. This loophole is not only foreseeable, it’s highly likely. So, what happens when the expected ￡1.5 billion fails to materialise? The tax burden will fall elsewhere, most likely back on the taxpayer, while the benefits remain elusive.

A Rushed and Unrealistic Timeline

Then there's the question of timing. Schools and families need years, not months, to prepare for such a monumental shift. Rushing this policy through could force private schools to cut scholarships, lay off staff, or even close down. The knock-on effect would extend far beyond the school gates, negatively impacting students and local communities alike.

Private schools aren’t just for the wealthy—they also offer scholarships to talented students from less privileged backgrounds and frequently open their facilities to the public. Removing these contributions would hurt more than it helps.

A Flawed Policy with Long-Term Costs

In the end, while the intention behind this VAT policy might be well-meaning, its execution is fundamentally flawed. Instead of boosting revenue and creating fairness, it risks costing taxpayers far more than it generates and disrupting education for thousands of students. If this policy moves forward as is, it could do more harm than good, hurting the very communities it’s supposed to help.

We need a more thoughtful, evidence-based approach—one that doesn’t simply penalise private education but ensures all children, regardless of their circumstances, can access the support they need to thrive.