Latest news with #VAT raid
Telegraph
3 days ago
- Business
- Telegraph
Cost of private school to double in a generation to £380k
The cost of educating children in private schools will almost double after Labour's VAT raid, analysis suggests. Parents of a pupil joining reception this September would be expected to pay £377,000 in school fees up until Year 13, according to Weatherbys private bank. By comparison, for privately-educated pupils collecting their A-level results this week, parents would have spent £205,000 over the course of their education. These figures assume annual inflation of 3pc, which accounts for two thirds of the price increase, with Labour's VAT levy responsible for the rest. For children attending boarding school, the cost of sending a child from Year 3 to Year 13, assuming they spend the first three years of their education at a day school, will reach £763,000 – up from £413,000 currently. Weatherbys said that while the increase is just under double what today's school leavers would have paid, parents should budget for a 100pc increase. Oliver Barnett, head of private clients, said: 'This degree of uncertainty may make parents feel concerned. The key thing is to be realistic about the costs of private education from the start and to make robust plans with your adviser. 'Often grandparents help with school fees and this can be part of their inheritance tax planning.' Mr Barnett also warned parents to think carefully about the long-term viability of any school chosen. The Telegraph is aware of 48 schools that have so far closed citing Labour's 20pc levy as the main reason. This week, Our Lady's Abingdon, a 160-year-old Catholic school in Oxfordshire, announced it was closing with immediate effect, leaving hundreds of pupils without a place for September. Governors for the school blamed the VAT raid for its 'sharp decline in pupil numbers' as well as the rise in employers' National Insurance. Mr Barnett said: 'Pupil numbers have fallen by 5pc in the key intake years of reception, Year 3 and Year 7. In addition to falling rolls, private schools have lost their eligibility for business rates charitable relief – and then there's the increase in employer National Insurance contributions. So costs are rising sharply. 'Many established schools will sail through this, but for others it will be tough. You want your child settled in a school, and if it closes partway through their education, that can be terribly disruptive.' Alice Haine, of wealth manager Bestinvest, said the fee increases left parents facing difficult choices, with some choosing to only educate their children privately for the most important school years. She said: 'Private education will become a luxury reserved for the ultra-wealthy, rather than aspirational professionals willing to make sacrifices elsewhere. 'More parents may choose to shorten a child's private education stint, opting for primary only, secondary only, or until their child finishes GCSEs, or even just sixth form.' The Weatherbys study also shows how school fees can quickly rise further if the rate of inflation increases. In a scenario where annual inflation is 5pc, the cost of sending a child to boarding school is close to £1m at £907,000, while a day pupil would cost £443,000. Analysis by The Telegraph found private school fees will rise by more than 17pc in the upcoming academic year. The average Year 13 day fees will jump from £21,035 to £24,600 between September 2024 and September 2025, according to an audit of fees for 228 independent schools. Rathbones Asset Management has forecast that parents will pay an extra £77,000 over their child's school life because of VAT, rising to £96,000 if they attend a London private school where fees are higher. For boarding school pupils it could cost parents £111,000 extra, assuming the school passes on the 20pc levy in full.
Daily Mail
04-08-2025
- Business
- Daily Mail
School's out forever! Labour's VAT raid sees more than 50 private schools announce closures so far this year
More than 50 private schools have closed or announced plans to do so this year after Labour 's VAT raid came into force in January. The new 20 per cent tax on fees has hit school budgets partly due to families being priced out and leaving the sector. New analysis shows at least 54 private schools have folded since January 1, when the tax became effective. These include top prep schools, sixth-form colleges and those serving children with special educational needs (SEN). Julie Robinson, chief executive of the Independent Schools Council, told The Times: 'We remain concerned about children falling through the cracks as specialist schools are threatened or become out of the reach of the parents who have depended on them.' Among those affected was the century-old Moorlands School in Leeds, which blamed Labour's tax raid on fees and other rising costs when it announced closure last month. Also closing were nearby Fulneck School in Pudsey, and Queen Margaret's School for Girls, based in Escrick, York. In the south, Park Hill School in Kingston, Surrey, and Falcons School, in Putney, southwest London, both announced closures due to falling pupils following the tax change. Critcis say the closures have put extra pressure on local state schools, where pupils are having to migrate. Last month, it was revealed state schools in Kent received almost 100 inquiries from parents about places in just 48 hours after Bishop Challoner School announced closure. The latest government figures show that in January, there were 582,477 pupils in independent schools in England, down from 593,486 the previous year - a sharper decline than expected. While the number of independent schools still rose over the same period, from 2,421 in January last year to 2,456 in January this year, the increase would probably have been higher were it not for the introduction of VAT on school fees, according to sector insiders. The Government has insisted the policy is not causing significant disruption. It says approximately 50 mainstream private schools typically close each year anyway, due to a range of reasons. A Department for Education spokesman said: 'Ending tax breaks for private schools will raise £1.8 billion a year by 2029-30 to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive.' 'The number of children in independent schools has remained steady, while the most recent data shows the rate of families getting a place at their preferred secondary school is at its highest in almost ten years.' In June parents and private schools lost their legal battle against VAT on fees in the High Court. They argued the policy was discriminatory against children with SEN, and other special characteristics. Independent schools support more than 100,000 children with SEN. Bridget Phillipson, the Education Secretary, has said the money raised will pay for 6,500 new teachers and other state school improvements. However, Keir Starmer has also appeared to suggest on Twitter the money could be siphoned off to pay for housing.
