Briefing: VAT in Schools

The UK government has proposed significant fiscal changes that would affect private schools in England. These changes include adding value-added-tax (VAT) on private school fees at 20% and removing charitable rates relief for private schools. These measures are part of broader efforts to address inequality in education and raise additional revenue for the public sector. However, there is significant concern that these changes will disproportionately impact smaller faith schools and could lead to the closure of a number of smaller schools, resulting in upheaval for families that rely upon them.

This briefing aims to outline the potential impact of this change in policy for faith schools from the perspective of Muslim schools, however, the issues outlined are applicable to faith schools more broadly. We hope that this briefing is of use to parliamentarians in engaging in the inherent nuances of this issue and to Muslim communities in protecting their access to faith schools in their areas.

Ultimately, we recommend that the draft Finance Bill Measures be amended to include thresholds based on a cap of tuition fees at between £5,000 – £10,000. This will ensure that smaller schools are not disproportionately impacted by these changes.