The government's plan to impose 20% VAT on private school fees from 1 January next year may be delayed amid warnings from unions, tax experts and school leaders that the deadline is unworkable. The Treasury initially refused to confirm the start date, stating the tax would be introduced 'as soon as possible', but later insisted it would stick to the 1 January deadline.
Numerous organisations, including those supportive of the policy, are urging a delay until September 2025 to allow schools time to register for VAT and assess the impact. The NASUWT teaching union expressed concerns about redundancies in the private sector and potential loss of teachers from the profession, while the Association of School and College Leaders recommended a comprehensive impact assessment and postponement.
Private school leaders say they cannot register for VAT until the plans are enshrined in law, which will not happen until after the Budget on 30 October. Accountants and tax experts warn this leaves insufficient time, especially as term bills for January are typically sent in December. The Chartered Institute of Taxation noted that neither HMRC nor schools may be ready for the effective date.
There are also fears over the impact on special educational needs and disabilities (Send) services, as state schools may face increased assessments for pupils moving from private schools. The Treasury has been flooded with calls for a delay and proper impact assessment in the official consultation responses.
While the government has not indicated any watering down of the plan, any delay would be politically embarrassing, especially after it confirmed it is reconsidering parts of its non-dom tax reforms due to lower-than-expected revenue. Labour has said the VAT policy would fund 6,500 new teachers and free breakfast clubs in primary schools.
