Labour Implements VAT on Private School Fees to Fund State Education

The new 20% tax on private school fees is projected to generate £1.7 billion annually for underfunded state schools, but critics argue it burdens middle- and low-income families.

The Labour government’s 20% VAT on private school fees came into effect on January 1, aiming to address funding gaps in state education.
The policy is expected to raise £1.7 billion annually, with advocates emphasizing the need to prioritize the 94% of UK children in state schools over private institutions.
Critics highlight the financial strain on middle- and low-income families, with some parents, like a single mother earning £12,500 annually, struggling to afford increased fees.
Private school fees are predicted to rise by an average of 14%, potentially forcing 40,000 students to leave private education, according to the Institute for Fiscal Studies.
Supporters argue the tax ends an unfair subsidy for elite institutions, while opponents claim it disproportionately affects families outside the wealthiest income brackets.