Private schools slam VAT charge timing
Private schools in Scotland have been left “disappointed” by Labour’s timetable for the introduction of VAT on fees.
The government at Westminster announced this week that 20 per cent VAT would be charged on private school fees across the UK from January 1, 2025. It will also apply to pre-payments of fees for terms starting on or after January 1 next year, or made on or after July 29, 2024.
The independent sector in Scotland had been hoping the charges would not be implemented during the school year, and that parents and schools would be given more time to plan for the switch.
Lorraine davidson, chief executive of the Scottish Council of Independent Schools (SCIS), said: “We are disappointed by the early date for the imposition of VAT on school fees.
“School budget sand fees have already been set for the next academic year and this gives families and schools very little time to prepare for the change .”
Sc is is still to receive a reply to a letter it sent to Bridget Phillipson, who is now education secretary in Sir Keir Starmer’s government, asking for a meeting to discuss the sector’s concerns about the VAT change.
The body fears Scottish parents and schools will be disproportionately impacted, for various reasons, including lower average incomes than parts of England, and that this has not been fully considered by Labour ministers. It is understood SCIS plan to highlight this in response to an official consultation.
The sector has warned the policy will disrupt the education of thousands of youngsters who could be forced out of school due to a resulting rise in costs, potentially swamping the under-pressure state sector.
SCIS estimates this could be the case for 6,000 independent school pupils north of the Border, based on a fall in enrolments of 20 per cent. However, the Institute of Fiscal Studies believes the decline is likely to be of between 3 per cent and 7 per cent, or 900 to 2,100 pupils in Scotland. The move, which could raise around £150 million for scotland’ s budget, is popular, with a pre-election poll for The Scotsman showing more than half of Scots support the plans, with just 16 per cent opposing the policy. As the VAT timetable was confirmed on Monday, Chancellor Rachel Reeves was telling the Commons that Labour had found a £22 billion hole in the public finances that she claimed was “covered up by the Conservative Party”.
“Where the previous government ducked the difficult decisions, I am taking action,” she said. “Knowing what they did about the state of the public finances, they continued to make unfunded commitment after unfunded commitment that they knew they could not afford, putting party before country and leaving us with an overspend of £22bn this year.
“Where they presided over recklessness, I will bring responsibility. I will take immediate action.”
Former chancellor Jeremy Hunt responded, saying: “The Chancellor wants to blame the last Conservative government for tax rises and project cancellations that she has been planning all along.”
He added: “The metrics speak for themselves. inflation is 2 per cent today – nearly half what it was in 2010 when we had to clear up the mess inherited from a Labour government.”
This gives families and schools very little time to prepare for the change