Government accused of ‘rushing’ VAT on private schools plan as impact assessment due just weeks before introduction

The government has been accused of “rushing” plans to remove the VAT exemption from private schools, with an impact assessment due just weeks before the policy comes into effect.

From January, Labour will scrap the VAT exemption and business rates relief for private schools in a bid to fund 6,500 new teachers in state schools.

However, the government has been accused of “rushing the implementation of this change”, with shadow education secretary Damian Hinds pointing out an impact assessment on the “likely consequences” has yet to be published.

Responding to a written question, Treasury minister James Murray confirmed that “details of the government’s assessment of the expected impacts of these policy changes will be published at the budget” on 30 October.

This is only two months before the policy is due to come into effect on 1 January 2025, and will likely include details of whether schools will be forced to increase their fees – or face the possibility of closure.

Mr Hinds told Sky News the government is “rushing the implementation of this change”.

The shadow education secretary said: “They are seeking to introduce this tax part-way through an academic year, having given no impact assessment on the likely consequences of the changes on either the private or state sector, nor how this will impact pupils with special needs or from a minority religious background.”

He also warned the impact of this change could “see thousands of pupils enter state schools, increasing class sizes and disruption for teachers and pupils and increasing costs for the taxpayer”.

The government has suggested the impact report, which is verified by the Office for Budget Responsibility, will largely look at wider sector impacts and expected behavioural changes.

A source said parents and schools will have had five months to prepare for the VAT hike, claiming the implications of the policy were made clear by Chancellor Rachel Reeves on 29 July, when she confirmed the scope and date of the change.

A government spokesperson added: “We want to ensure all children have the best chance in life to succeed.

“Ending tax breaks on private schools will help to raise the revenue needed to fund our education priorities for next year, such as recruiting 6,500 new teachers.”

Prime Minister Sir Keir Starmer has previously said he believes private schools will adapt to VAT tax changes, adding “they don’t have to pass the cost on to parents”.

And recently Education Secretary Bridget Phillipson said private schools which have closed have themselves to blame – dismissing any suggestion they have shut because of the government’s VAT policy.

But the policy has already had an impact, with Eton College confirming in August that fees are “likely” to rise by 20% in January to about £63,000 a year because of VAT changes.

That is an increase from £52,749 currently charged for those attending the private boys’ school near Windsor in Berkshire.