Parents could have to pay VAT on their children’s private school fees as soon as January as Chancellor Rachel Reeves prepares to bring in the policy nine months earlier than expected.
The UK Government confirmed it will remove the 20% tax exemption in last week’s King’s Speech. The change, which ministers expect will raise £1.6billion a year to fund an additional 6,500 specialist state school teachers, will be included in Reeves’s first budget this autumn.
It will become law after being passed in Labour’s first finance bill, which means the earliest it could take effect would be in the term starting in January 2025.
It had been widely expected that the policy would probably not come into force until the start of the school year in September 2025.
But senior Whitehall sources told the Sunday Times that the government is preparing to introduce the changes “as soon as possible” and they could take effect as soon as January — nine months earlier.
If the government brings in the VAT increase from January, some head teachers say annual fees may have to rise twice in the next school year.
Parents have already been warned they are facing an average fee rise of 8% in September. The second rise, in the new year, could pass on the full VAT cost.