The government believes it is right these changes were introduced as soon as possible in order to raise the funding needed to help deliver our commitments to public services, including those relating to education and young people. Together, the VAT and business rates reforms are expected to raise £1.8 billion per year by the 2029/30 financial year.

The government believes it is right these changes were introduced as soon as possible in order to raise the funding needed to help deliver our commitments to public services, including those relating to education and young people. Together, the VAT and business rates reforms are expected to raise £1.8 billion per year by the 2029/30 financial year.

Another private school, Queen Margaret’s school for girls in York, has announced its closure, months after the Carrdus school in my constituency announced its closure. Over 11,000 children have left the private sector in this first year, which is more than three times what the Government expected. Does the Minister believe that the impact assessment of the introduction of VAT on private schools is correct? Will she look again at the flawed case for it?

Tax policy is a matter for HM Treasury (HMT). HMT published a tax information and impact note concerning the introduction of VAT on independent school fees which is accessible here: https://www.gov.uk/government/publications/vat-on-private-school-fees/applying-vat-to-private-school-fees. Information about individual schools is available at the Get Information About Schools service.

Between 2010 and 2024 over 1,000 private schools closed. During the same period 1,213 opened, of which 705 were independent special schools.

The majority of children with special educational needs (SEN), including most with education, health and care (EHC) plans, are already educated in mainstream state-funded schools where their needs are met. The department works to support local authorities to ensure that every local area has sufficient places for children that need them, including pupils with SEN requiring places at state-funded schools.

The government is providing an almost £1 billion uplift in high needs revenue funding for the 2025/26 financial year. The government has also announced £740 million of high needs capital funding for 2025/26 to invest in places for children and young people with special educational needs and disabilities, or who require alternative provision.

Local authorities fund pupils’ places in private schools where their needs can only be met in a private school. Where this is the case, local authorities will be able to reclaim that VAT on the fees from HMRC.

Tax policy is a matter for HM Treasury.

As set out in the government response to the technical note on applying VAT to private school fees, the government believes it was right to introduce these changes as soon as possible in order to raise the funding needed to help deliver our education priorities for the 94% of children who attend state schools in the UK. This response is accessible at: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools.

As a result of the January 2025 start date, the VAT policy is forecast to raise £460 million in the 2024/25 financial year.

The January 2025 start date gave schools and parents five months to prepare from the date the policy was announced.

HMRC has taken action to support private schools through the change, including providing detailed guidance, running webinars and allocating additional resource to process VAT registration applications.

It is the government’s ambition that all families have access to high quality, affordable and flexible early education and care, giving every child the best start in life and delivering on our Plan for Change.

Local authority-maintained schools provide education for no charge, so are outside the scope of VAT. Additionally, some other providers are exempt from VAT. The provision of nursery services by a provider registered with Ofsted, as a supply of welfare rather than of education services, is also exempt. Local authority-run schools and nurseries can recover some of their VAT through the Section 33 scheme, which aims to ensure that VAT does not divert locally-collected taxes away from their intended use. Private nurseries, like private schools, cannot recover their VAT. Any change to this approach would come at a cost to the exchequer and any reduction in tax paid is a reduction in the money available to support important public services, including the NHS and policing. The government therefore has no plans to change the VAT treatment of nurseries. However, all taxes are kept under constant review.

From this year, we plan to provide over £8 billion for the early years entitlements, a more than 30% increase compared to 2024/25. The early years pupil premium rate has increased by over 45% compared to the 2024/25 financial year, equivalent to up to £570 per eligible child per year. We are also providing further supplementary funding of £75 million for the early years expansion grant and £25 million through the forthcoming National Insurance contributions grant for public sector employers in early years.

As set out in HM Treasury’s tax information and impact note published on GOV.UK, the introduction of VAT is anticipated to have a very limited impact on the number of pupils in state and private schools. The department has not seen any evidence that contradicts the expectations set out in the government’s impact assessment.

Ending tax breaks on private schools will help raise around £1.8 billion per year by the 2029/30 financial year for investment in public services, including state-funded education which serves 94% of children. This will help break down barriers to opportunity, ensuring every child has access to high-quality education.

​Local authorities are responsible for securing school places for children in their area. Pupil numbers in schools fluctuate for a number of reasons, and the school funding system is already set up to manage that. The department provides capital funding through the basic need grant to support the provision of mainstream school places, based on local authorities’ own pupil forecasts and school capacity data.

As set out in HM Treasury’s tax information and impact note published on GOV.UK, the introduction of VAT is anticipated to have a very limited impact on the number of pupils in state and private schools. The department has not seen any evidence that contradicts the expectations set out in the government’s impact assessment.

Ending tax breaks on private schools will help raise around £1.8 billion per year by the 2029/30 financial year for investment in public services, including state-funded education which serves 94% of children. This will help break down barriers to opportunity, ensuring every child has access to high-quality education.

​Local authorities are responsible for securing school places for children in their area. Pupil numbers in schools fluctuate for a number of reasons, and the school funding system is already set up to manage that. The department provides capital funding through the basic need grant to support the provision of mainstream school places, based on local authorities’ own pupil forecasts and school capacity data.

This government is committed to breaking down barriers to opportunity and ensuring every child has access to high quality education. The government’s ambition is that all children and young people with special educational needs and disabilities receive the right support to succeed in their education and as they move into adult life. We are committed to improving inclusivity and expertise in mainstream schools, as well as ensuring special schools cater for those with the most complex needs.

Local authorities fund pupils’ places in private schools where their needs can only be met in a private school. For example, in England, where attendance at that private school is required by a child’s education, health and care (EHC) plan, local authorities will be able to reclaim the VAT on the fees from HMRC.

The decision to move a child from a private to a state-funded school, or vice versa, is a matter for parents. The majority of children with special educational needs (SEN), including most with EHC plans, are already educated in mainstream state-funded schools where their needs are met. All children of compulsory age are entitled to a state-funded school place that is free for parents. Schools are required to identify and address the SEN of the pupils they support and to use their best endeavours to make sure that a child or young person with SEN gets the support they require.

The government works to support local authorities to ensure that every local area has sufficient places for children of compulsory school age who need them and works to provide appropriate support where pupils with SEN require places at state-funded schools.

As made clear in the HM Treasury impact assessment, the introduction of VAT is anticipated to have extremely limited impact on the number of pupils in private schools. The department has not seen any evidence that contradicts the expectations set out in the government’s impact assessment.

It is a commercial decision for individual schools to decide how they will fund the additional costs around the VAT policy. There are a variety of ways in which a school may choose to do this, including reducing their surpluses or reserves, cutting back on non-essential expenditure and increasing fees.

The department has made no separate estimate of the number of pupils in individual local authority areas who have left the independent school system as a result of VAT on school fees.

​The government predicts that, in the long-term steady state, there will be 37,000 fewer pupils in the private sector in the UK as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population.

Of the expected 37,000 pupil reduction in the private sector, the government estimates an increase of 35,000 pupils in the state sector in the steady state following the VAT policy taking effect, with the other 2,000 consisting of international pupils who do not move into the UK state system and domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over 9 million. This movement is expected to take place over several years.

The impact on individual local authorities will interact with other pressures and vary between authorities. Every year, many pupils move between schools, including between the private and state-funded sectors.

Local authorities routinely support parents who need a state-funded school place, including where private schools have closed. Where local authorities are experiencing difficulties in ensuring there are enough school places for children that need them, the department will offer support and advice.

​The department provides capital funding through the Basic Need grant to support local authorities to provide school places, based on their own pupil forecasts and school capacity data. They can use this funding to provide places in new schools or through expansions of existing schools.​

Local authorities in the East Midlands region have been allocated a total of £177.1 million, including £23.2 million for Lincolnshire, to support the provision of new mainstream school places needed over the current and next two academic years, up to and including the academic year starting in September 2026.

Approximately 50 mainstream private schools close each year. There are a range of reasons for closure, including financial viability and action taken by the department where schools are not meeting standards. We expect the number of private school closures to remain relatively low, and be influenced by various factors, not just the VAT policy.

The government is aware there may be a temporary increase in the schools closure rate over the normal rate during the few years after implementation of the VAT policy. It is estimated that this may be broadly equivalent to 100 schools in total closing over the next 3 years, in addition to the normal levels of turnover, after which closures would return to historic norms. The government has conducted a thorough and detailed analysis of this policy’s impacts and published a Tax Impact and Information Note (TIIN), which can be found here: https://www.gov.uk/government/publications/vat-on-private-school-fees/ac8c20ce-4824-462d-b206-26a567724643#summary-of-impacts.

Historically, there has been significant turnover within the sector. Since 2000, average fees in the sector have increased by 75% in real terms, while pupil numbers have remained stable, as have total school numbers.

Local authorities routinely support parents who need a state-funded school place, including where private schools have closed. The department works with local authorities to support place planning and ensure there is capacity in the state-funded sector to meet demand. Parents can seek places in other private schools or find a state-funded place through their local authority.

The department has made no separate estimate of the number of pupils in individual local authority areas who have left the independent school system as a result of VAT on school fees.

​The government predicts that, in the long-term steady state, there will be 37,000 fewer pupils in the private sector in the UK as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population.

Of the expected 37,000 pupil reduction in the private sector, the government estimates an increase of 35,000 pupils in the state sector in the steady state following the VAT policy taking effect, with the other 2,000 consisting of international pupils who do not move into the UK state system, and domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over 9 million. This movement is expected to take place over several years.

The impact on individual local authorities will interact with other pressures and vary between authorities. Every year many pupils move between schools, including between the private and state-funded sectors.

Local authorities routinely support parents who need a state-funded school place, including where private schools have closed. Where local authorities are experiencing difficulties in ensuring there are enough school places for children that need them, the department will offer support and advice.

​The department provides capital funding through the Basic Need grant to support local authorities to provide school places, based on their own pupil forecasts and school capacity data. They can use this funding to provide places in new schools or through expansions of existing schools.

Surrey County Council has been allocated just below £43 million to support the provision of new mainstream school places needed over the current and next two academic years, up to and including the academic year starting in September 2026.

Hampshire County Council has been allocated just over £22.2 million to support the provision of new mainstream school places needed over the current and next two academic years, up to and including the academic year starting in September 2026.

The department has made no separate estimate of the number of pupils in individual local authority areas who have left the independent school system as a result of VAT on school fees.

​The government predicts that, in the long-term steady state, there will be 37,000 fewer pupils in the private sector in the UK as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population.

Of the expected 37,000 pupil reduction in the private sector, the government estimates an increase of 35,000 pupils in the state sector in the steady state following the VAT policy taking effect, with the other 2,000 consisting of international pupils who do not move into the UK state system, and domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over 9 million. This movement is expected to take place over several years.

The impact on individual local authorities will interact with other pressures and vary between authorities. Every year many pupils move between schools, including between the private and state-funded sectors.

Local authorities routinely support parents who need a state-funded school place, including where private schools have closed. Where local authorities are experiencing difficulties in ensuring there are enough school places for children that need them, the department will offer support and advice.

​The department provides capital funding through the Basic Need grant to support local authorities to provide school places, based on their own pupil forecasts and school capacity data. They can use this funding to provide places in new schools or through expansions of existing schools.

Surrey County Council has been allocated just below £43 million to support the provision of new mainstream school places needed over the current and next two academic years, up to and including the academic year starting in September 2026.

Hampshire County Council has been allocated just over £22.2 million to support the provision of new mainstream school places needed over the current and next two academic years, up to and including the academic year starting in September 2026.

The department has made no estimate of the number of pupils in individual local authority areas who will leave the independent school system as a result of VAT on school fees. With regard to England, the government predicts that in the long-term steady state, there will be 37,000 fewer pupils in the private sector in the UK as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population.

​​Of the expected 37,000-pupil reduction in the private sector, the government estimates an increase of 35,000 pupils in the state sector in the steady state following the VAT policy taking effect, with the other 2,000 consisting of international pupils who do not move into the UK state system, and domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over nine million. This movement is expected to take place over several years.

The impact on the state education system as a whole is expected to be very small. Ending tax breaks on private schools will help raise revenue to drive forward the change the government is committed to delivering for the 94% of pupils who attend state schools.

​The impact on individual local authorities will interact with other pressures and vary.

​Every year many pupils move between schools, including between the private and state-funded sectors. Local authorities routinely support parents who need a state-funded school place, including where private schools have closed. Where local authorities are experiencing difficulties in ensuring there are enough school places for children that need them, the department will offer support and advice.

​​The department provides capital funding through the basic need grant to support local authorities to provide school places, based on their own pupil forecasts and school capacity data. They can use this funding to provide places in new schools or through expansions of existing schools. The department has already confirmed nearly £1.5 billion of allocations to support local authorities to create school places needed over the current, and next two, academic years, up to and including the academic year starting in September 2026, including just under £9.7 million for Leicester City Council.

My right hon. Friend, the Secretary of State for Education, has made no assessment of the impact of applying VAT to school fees on children who do not attend private schools but may utilise their facilities.

The 20% standard rate of VAT applies to all education services, vocational training and boarding services provided by private schools for a charge. The VAT treatment of services delivered by third-party providers at private schools, for instance, self-employed music teachers or organisations that rent out private schools’ facilities, are unaffected by this policy. These services will always have been subject to VAT, if the provider is VAT-registered, unless it is private tutoring of a subject ordinarily taught in schools, which is exempt from VAT.

However, any before or after school childcare, or childcare-based holiday clubs, that consists solely of childcare and does not fall within the definition of education will remain exempt from VAT by virtue of the fact that welfare services are exempt from VAT.

HM Revenue and Customs have published guidance on charging and/or reclaiming VAT on good and services related to private school fees, which can be accessed at: https://www.gov.uk/guidance/charging-and-reclaiming-vat-on-goods-and-services-related-to-private-school-fees.

The government’s ambition is that all children and young people with special educational needs and disabilities (SEND) or in alternative provision receive the right support to succeed in their education and as they move into adult life.

​At the Autumn Budget 2024, the government announced a £1 billion uplift in high needs funding in the 2025/26 financial year, providing additional support and improving outcomes for the more than a million children in the state sector with SEND.

​​Most children with special educational needs, including most with education, health and care (EHC) plans, are already educated in mainstream state-funded schools. All state-funded schools support children with SEND. All children of compulsory age are entitled to a state-funded school place that is free for parents. Where a private school place is necessary to support a child with SEND, the local authority will fund it through an EHC plan.

​​Local authorities have a statutory duty for ensuring sufficient state school places in their area. Local authorities routinely support children who need a state-funded school place, including where private schools have closed or where pupils move between schools. The department does not collect data on in-year school applications or admissions, but where local authorities are experiencing difficulties in ensuring there are enough school places for children who need them, the department will offer support and advice.

​​The department expects all schools admitting new pupils in-year to provide them with appropriate support, including where they have SEND. Schools will need to work with their local authority where pupils have additional needs that cannot be met within the school.

Schools with charitable status are required to demonstrate public benefit to retain their charitable status and engaging in partnership activities with state-funded schools is one such way to do that. This may in some cases include the sharing of private school facilities, such as sporting facilities. The government does not expect the introduction of VAT to reduce a school's obligations to show public benefit or for partnership activity to decrease.

The department’s home-to-school travel policy aims to make sure that no child is prevented from accessing education due to a lack of transport. Local authorities must arrange free home-to-school travel for eligible children of compulsory school age, who attend their nearest school and would not be able to walk there because of the distance, their special educational needs, disability or mobility problem, or because the nature of the route means it would be unsafe for them to do so. Schools are not required to arrange home-to-school travel for their pupils, but some choose to do so. We do not expect the removal of the VAT exemption on independent school fees to have an impact on the provision of home-to-school travel for children with SEND.

Economic impacts of the policy to apply VAT to private school fees are covered in the tax information and impact note (TIIN) that the government has published on GOV.UK. The publication can be accessed here: https://www.gov.uk/government/publications/vat-on-private-school-fees/ac8c20ce-4824-462d-b206-26a567724643.

The Ministry of Housing, Communities and Local Government (MHCLG) has introduced the Non-Domestic Rating (Multipliers and Private Schools) Bill to remove eligibility to business rates relief from private schools that are charities. MHCLG has published an impact note alongside the Bill, and this can be found at: https://publications.parliament.uk/pa/bills/cbill/59-01/0129/ImpactNote.pdf.