UK Government Prepares for Potential Private School Closures Following VAT Policy Implementation

Officials anticipate increased demand for state school places as VAT on private school fees takes effect in January, raising concerns over closures of smaller institutions.

• The UK government will introduce a 20% VAT on private school fees starting January 1, with business rates relief for independent schools ending in April 2025.
• Treasury estimates suggest the policy could result in 37,000 fewer private school pupils long-term, with 35,000 expected to shift to state schools and others opting for homeschooling or leaving the UK system.
• Smaller private schools with lower fees and those in competitive regions are considered most at risk of closure due to the financial strain of the policy changes.
• Officials are monitoring vulnerable schools and preparing contingency plans to assist local authorities in managing potential increases in state school enrollment.
• The government projects the VAT policy will raise £1.8 billion annually, funding the recruitment of 6,500 additional state school teachers, but critics warn of underestimated impacts on both private and state sectors.

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