Labour leader Sir Keir Starmer has pledged to end private schools’ exemption from VAT.
He first committed to the policy in September 2021 but reaffirmed it in a speech in Gateshead on Monday in which he also promised to move away from the “arms race of fantasy economics” on offer from Tory leadership hopefuls.
In a speech that criticised how candidates for the Conservative leadership went along with Boris Johnson’s tax rises, Sir Keir said: “When I say we are going to pay for kids to catch up at school, I also say it’ll be funded by removing private schools’ charitable status.”
Under current rules, independent school fees are exempt from VAT.
Private schools have said the proposals will hit less affluent families in the sector hardest.
Independent Schools Council chief executive Julie Robinson said the proposals would have “the greatest impact on the families who work the hardest to pay the fees” and called the move a “tax on aspiration”.
“Ultimately, the policy would threaten the survival of the smallest independent schools, which operate on tight margins and without large endowments,” she added.
She said that Labour’s policy would reduce the amount of money available to improve state schools.
“In the fifth year of a policy, with independent schools closing and additional pupils moving into the state sector, the Department for Education will be losing more than £400 million per year from the schools budget,” she said.
“Instead of counter-productive tax rises on parents, independent schools want to support state schools by building upon partnership work with their friends and colleagues in the state sector.
“Thousands of these projects are under way, improving education for all, and strengthening bonds between schools. Partnership – not punitive taxes – is the best way for independent schools to contribute to catch-up efforts and create more learning opportunities for all pupils.”
