What is Labour's private school tax plan ahead of the general election?

What is Labour's private school tax plan ahead of the general election?

The Labour party has promised to charge private schools 20% VAT, as well as end business rate relief, if it came to power after the general election.

This would reportedly raise about £1.7bn of funds that Labour promises to send into the state school system.

This has drawn criticism from some private school headteachers, with warnings that this could cause school fee increases of up to £3,000.

However, Shadow Education Secretary Bridget Phillipson has responded that the warnings are simply “scaremongering”.

“I don’t accept the scaremongering, there are ample places in state schools, particularly in primaries,” she said. “That’s where we’re seeing the sharpest declines in terms of where places will be needed.”

Here’s a closer look at what the private school tax plan could mean.

Will Labour tax private schools?

Labour argues that private schools currently benefit from what they describe as an “unfair tax break” where they don’t pay VAT on fees.

By removing this stipulation, Labour will use the money to improve standards in state schools with more teachers and funding, including resources for mental health support staff in every school.

This comes after the National Education Union organised several strikes in 2023 over low pay and working conditions for teachers in the UK.

Do private schools make a profit?

For-profit schools are not allowed in the UK, with the vast majority of independent schools classed as charities or non-profit making trusts.

However, their funds instead go towards the running of the schools, with the majority of them receiving little or no funds from the government.

Did Rishi Sunak or Keir Starmer go to private school?

Labour party leader Sir Keir Starmer attended a voluntary-aided selective grammar school as a teenager, which was later converted into an independent fee-paying school in 1976 while he was a student.

He was exempt from paying fees until the age of 16 and then received a bursary from the private school’s charity arm for his sixth-form study fees.

Conservative leader and current Prime Minister Rishi Sunak attended a private school, studying at boarding school Winchester College as a day boy. He later became the head boy of the college.