Labour's Private School VAT Policy Advances Despite Backlash

The Finance Bill, including a 20% VAT on private school fees starting January 2025, passes its second reading in Parliament, with legal challenges and concerns of pupil exodus looming.

The Labour Government's Finance Bill, which includes a 20% VAT on private school fees, cleared its second reading in the House of Commons with a 156-vote majority.
The policy, set to take effect in January 2025, aims to generate up to £1.7 billion annually by 2029-30 to support state education, but private schools warn it could lead to closures and a shift of pupils to state schools.
The Independent Schools Council plans to challenge the VAT policy in court, citing potential breaches of human rights laws and the disproportionate impact on families of children with special educational needs.
The Budget Responsibility estimates that 35,000 students will leave private schools due to the VAT, with 37,000 total departures expected when including international and homeschooled pupils.
Labour has pledged to use the additional revenue to fund state education improvements, including hiring 6,500 new teachers and creating 3,000 nurseries, though concerns remain about the timeline and feasibility of these plans.

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