It has taken Labour less than six months in office to deliver on one of their key manifesto promises, and from Wednesday 1 January 2025, all private schools in the UK will be compelled to pay VAT – and the 20% tax increase is going straight back into the system.
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VAT taxed on private schools going straight to state facilities
Rachel Reeves confirmed on Sunday that ‘every penny’ of the money raised from ending the VAT break for private education institutions will be invested solely into state schools. In the next year alone, an estimated £1.5 billion will be raised.
That will eventually rise to £1.7bn each year, by the end of Labour’s first term in office. Among other factors, this windfall is being pledged to recruit thousands of new teachers, and improve facilities and resources for Special Education Needs and Disabilities.
The plan is not without its critics, however. Scathing rejections have largely come from the right-wing, and Reeves has been accused of putting a tax on families ‘with aspirations’. However, the Chancellor has already move to dismiss these qualms.
Rachel Reeves pledges ‘every penny’ will be reinvested into public schools
Speaking earlier today, the Labour representative argued that the 94% of British children in state schools also have ‘a right to aspiration’, insisting that an urgent and wide-ranging recruitment drive would improve educational standards across the board.
“I recognise a lot of parents work hard to be able to send their children to private schools but all parents are aspirational for their children, including the 94% of children in our state schools. The number of children changing schools will also be very low.”
“Every single penny of that money [an estimated £1.7 billion a year by 2029] will go into our state schools to ensure every child gets the best start in life, and that is so often through being able to recruit and retain the best teachers.” | Rachel Reeves