85% parents considering removing children from private schools due to VAT increase – LBC poll

19 September 2024, 12:20

A poll of over 3500 parents across the UK carried out exclusively by LBC has revealed that 85% of them who have children in private schools are considering removing them because of the government’s removal of the VAT exemption.

Currently independent schools do not have to charge VAT because there is an exemption for education providers, however Labour plans to pass on a 20% tax burden to schools in January.

An impact assessment of the policy will be published on Budget Day, just eight weeks before it’s due to come into effect.

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Sophia from Birmingham has already removed her daughter from the private school she attended because the fee increase would not have been affordable.

“She really enjoyed her school, she was happy there, she was comfortable and had made some great friends, and then to suddenly have to leave – she was really upset,” she said.

Sophia’s son is currently in his last year at an independent primary school.

“To get him through the year would mean having to make a few more sacrifices in addition to what we’ve really done, but it’s definitely going to be a struggle.”

Over half of parents polled who have received notice from the school have been told they'll have to pay the full 20% increase to fees.

93% of those polled who are taking their children out of private school have so far been unable to find a place in a state school.

Jason, from the Suffolk, has two children currently in a private school, and doesn’t know if he will be able to afford to keep them there.

“We’ve incurred an 8% increase to our fees this year anyway - that was due to improvements the school had to make,” he said.

“Now they’ve communicated to us that we are likely to see an increase of 15% on top of that because of the VAT, so our fees in real terms will be increased by 23%.

“Our options might include homeschooling, at which point one of us will stop working, and that will be a loss in tax revenue to the government.

“We’ve looked into online schools, but I still have concerns about whether that will be sustainable and whether our children will flourish in that environment.

“And then we’ve also considered just quitting the UK and living overseas to seek out somewhere where we can still educate our children and have less of a tax burden.

“This policy is again another attack on the working middle class who are already taxed heavily and I just can’t see how it will ever realise the money that it states that it will do.”

If the government goes ahead with its plans, the UK will be the only country in the world to tax education.

Julie Robinson, General Secretary of the Independent Schools Council, believes up to 40,000 pupils may leave the independent sector once the policy is introduced, and may cause significant disruption to families as well as schools.

“We think this policy could possibly end up costing more because of the displacement of children over time,” she said.

“Given that most of these schools are small and already struggling on thin margins, I think sadly we will find some - if they lose a certain critical mass of pupils - will be worried about their future.

“We think this policy would make the sector more elitist because it will be parents who are struggling to meet the costs and the smaller schools who will be affected the most.”

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6% of pupils in the UK - equivalent to around 620,000 children - are educated in the independent sector, including at faith schools, specialist arts schools, bilingual schools, and schools that are able to provide places for children who have Special Educational Needs and Disabilities (SEND).

Sajjad Akram, headteacher at independent Muslim school Al-Khair Primary in Sandwell, believes his school may only survive a few months once the policy is introduced.

“Parents are already pulling their children out of the school – they’re having to think about whether to put food on the table or finance their child’s education,” he said.

“Ideally we’d only pass on 10% of the VAT increase to families - we’re under a lot of financial pressure like everybody else – but even a 10% for many families who are struggling is too much.

"The worst case scenario is that we will lose half our intake and we won’t be able to survive.

“The best case is we lose about 30% of pupils - so we’re kind of scuppered both ways.

“It’ll be a loss to the community and a loss of jobs for the people we employ.

The Institute of Fiscal Studies believes the plans will generate between £1.3 and £1.6 billion for the government.

Rudi Lockhart, Chief Executive of the Independent Schools Association, thinks the actual amount will be less than this.

“The overall schools budget in the state sector is over £60bn a year - to think that putting VAT ON independent school fees is going to be a significant change to the massive funding gap that the state sector has is simply naïve,” he said.

“One of my frustrations is that the types of schools that will be hit are the schools that are totally different from the stereotype that we see - I worry that the government’s view of the independent sector has been totally coloured by those famous schools with lovely ancient buildings.

“The reality is that most of the independent sector isn’t like that – it’s a sector that is based on independence and using that independence to do something different to the state sector.”

The survey was carried out in the last two weeks and distributed to parents via Education Not Taxation, a group campaigning against the policy, as well as other associations.

A government spokesperson said: “Ending tax breaks on private schools will help to raise the revenue needed to fund their education priorities next year, and that they don’t expect the policy to have a significant impact on the number of pupils attending private or state schools.”