Welsh private school makes 'existential' announcement ahead of Labour’s VAT plans

A week before the general election one of the UK's oldest private schools has made an announcement ahead of Labour’s VAT plans should they win power on Thursday, July 4. Christ College Brecon charges fees of up to £42,957 a year.

Its announcement signals that it expects Keir Starmer’s party to form the next government and introduce its manifesto policy to end the 20% VAT exemption on private schools. Christ College, which takes boarders and day pupils up to sixth form, described the imposition of VAT on private schools as an “existential crisis” as it appealed for donations from former pupils and supporters.

In a letter to “Old Breconians”, headteacher Gareth Pearson said the school would use its reserves to cushion any increase in fees caused by the policy and wouldn’t pass on increases immediately to parents. Labour believes it can raise £1.6bn a year by ending the 20 per cent VAT exemption as part of its plans to recruit around 6,500 specialist state school teachers. Join our WhatsApp news community here for the latest breaking news.

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Christ College was founded by royal charter in 1541, has around 400 pupils and describes itself on its website as "one of the oldest and most successful independent schools in Britain". Mr Pearson said he was confident of its future thanks to good financial management and any rise in fees wouldn't be passed on for years.

In a letter to “Old Breconians”, seen by WalesOnline, Mr Pearson said the school had a robust business plan to pay back money it took from reserves to cushion the VAT bill.

“If VAT is introduced in full, rather than impose the full amount on fees immediately, we have developed a plan to phase the passing on of the net cost of this tax to parents over a period of three years,” his letter says, “In the interim the school will cover the difference from its own reserves, which are vested in the Christ College Brecon Foundation.

“The purpose of the plan is to help soften the impact of the increase, making the transition more manageable for parents, despite the challenges. Separately, we have a strategic business plan to raise additional reserves to repay the foundation without needing to rely on school fee income.”

The headteacher said initial feedback from parents was positive. The Christ College Foundation was established to secure the long term future of the school to support bursaries and scholarships and while “the prospect of VAT on school fees is a potential existential crisis for the sector and Christ College, fortunately, the foundation is in a position to support the school over a finite period and will help mitigate the effects of VAT.”

Ending the 20% VAT break on private schools is among the most discussed policies in Labour’s election manifesto. It has even prompted fears of an influx of pupils taken out of private education into state maintained schools because of rising fees. The party won’t impose the VAT bill on them until at least 2025 if it wins the general election, shadow chancellor Rachel Reeves has suggested. But Christ College said it had been planning for the change for some time.

Mr Pearson’s letter also thanks “Old Breconians” for their support and reminds them they can pay donations to the school via direct debit.

And he finished by looking forward to the school’s 500th anniversary in 2041, saying: “We are confident the measures we have put in place will allow us to secure our future”.

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