Private school fee VAT plans could raise half of expected amount

HMRC found tax could bring in just £650m, according to reports

Jen Frost
clock • 2 min read

The Labour government’s plans to remove the value-added tax (VAT) exemption for private schools could raise less than half of the expected £1.6bn, according to HMRC analysis shared by the Sunday Times.

Labour's private school VAT policy could come into play next year, with funds said to be earmarked for state sector funding including teacher recruitment. In the most extreme case, HMRC calculated in January that the imposition could bring in just £650m, The Times reported. With around 554,316 pupils said to be in private schools, HMRC analysed the impact of 94,000 moving to state schools because of the plans. Were 60,000 to switch to state schools then the VAT add could raise £900m, it found. This rose to £1.15bn should around 28,000 pupils enter the state school system. More than...

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