Private Schools Struggle as Labour’s VAT Policy Triggers Closures

[Social Media]

 

A growing number of private schools are shutting their doors, blaming the Labour government’s new tax policy for their financial struggles. Since the introduction of VAT on school fees on January 1, twelve independent institutions have directly linked their closures to the policy, with dozens more folding since Labour first announced the plan.  

 

Government statistics reveal that 77 private and specialist schools in England have shut down since Labour disclosed in October 2023 that VAT would be imposed on school fees within its first year in power. While some closures were attributed to pre-existing financial difficulties, four schools have explicitly cited the VAT policy as the decisive factor in their shutdowns, and eight more have announced upcoming closures due to the tax burden.  

 

St Joseph’s Preparatory School in Stoke-on-Trent closed in December, just before the VAT policy took effect. The school described its closure as an “incredibly difficult” decision, driven by the “changes coming regarding independent school funding.” Roisin Maguire, who served as headteacher for 12 years, explained that parents “simply could not manage an extra 20 per cent” on fees and predicted more school closures to come.  

 

The policy’s impact is not limited to England. In Scotland, Cedars School in Greenock shut its doors in September, describing the VAT hike as the “straw that broke the camel’s back.” Kilgraston School in Perthshire, the country’s only Catholic boarding school, also cited VAT concerns as a key reason for its closure last August, warning that the policy would worsen declining pupil numbers and further strain its already precarious financial situation, which had recorded an £860,000 deficit in the last academic year.  

 

Several schools have announced closures at the end of this academic year, attributing their financial struggles directly to the tax policy. Among them is St Hilda’s Prep School for Girls in Hertfordshire, which recently informed parents that it was consulting on a possible closure by summer. The school, which counts former Home Secretary Suella Braverman among its alumni, admitted to operating at a significant financial loss. A letter to parents highlighted a range of financial pressures, including “falling pupil numbers,” the VAT introduction on school fees from January 2025, the rising employer National Insurance contributions, and the removal of an 80 per cent business rates relief from April 2025.  

 

While some schools have not explicitly linked their closures to the VAT policy, many were already struggling with declining enrollment and financial deficits, leaving them vulnerable to the effects of the tax hike. The government has stated that around 50 private schools typically close each year, but education leaders warn that the removal of business rates relief next month will trigger another wave of shutdowns. Under the change, charitable private schools in England will have to pay full business rates on their buildings for the first time.  

 

Experts predict that smaller private schools will be most at risk, while prestigious institutions such as Eton College, which have greater financial reserves and a wealthier parent base, will be less affected. Treasury estimates suggest that the VAT policy will ultimately reduce private school enrollment by 37,000 pupils—approximately 6 per cent—many of whom will need to transition to state schools, potentially straining public education resources.  

 

Labour MP Rupa Huq recently urged the government to consider reversing the policy if the economy improves, acknowledging that the private school sector is not a “one size fits all” system. She warned that the VAT measure could ultimately “make an elitist system more elitist” by limiting access to private education to only the wealthiest families.  

 

Meanwhile, the Independent Schools Council (ISC) has launched a High Court challenge against the policy, arguing that it infringes on the human rights of some children. A judicial review hearing is scheduled for April 1-3. Julie Robinson, chief executive of the ISC, has cautioned that the policy’s impact will continue to grow in the coming months and years.  

 

Neil O’Brien, the shadow schools minister, echoed concerns about the wider consequences of the tax, stating, “Once again, we can see the deeply damaging impacts of Labour’s education tax.” He warned that the closures of independent schools would increase pressure on already overstretched state schools, making it harder for parents to secure places for their children.  

 

“There are 130,000 children with special needs being educated in the independent sector at present, and if thousands of them are taxed into the state sector, that will put a lot of pressure on special needs provision,” he said. “At the end of the day, it will be parents, pupils, and teachers in the state sector that will pay the price for Labour’s ideological attack.”  

 

As the debate over Labour’s VAT policy intensifies, private schools across the country are left grappling with rising costs and uncertainty, with many fearing they will be next to close their doors.

 

Based on a report by The Telegraph  2025-03-06

 

Related Topics:

 Looming Crisis: Private Schools Face Closures Amid VAT Hike 

Top Oxfordshire Prep School to Close Amid Controversial VAT Policy on Private Education

England’s Special Educational Needs Crisis: A System in Desperate Need of Reform

Legal Challenge Against Private School VAT Policy Deems It Discriminatory

 

 

[JonnyF]

Entirely predictable.

 

Labour are the type of party that would jump in a swimming pool and then be shocked they were wet.

 

A stunning lack of insight. 

[Purdey]

Doesn't seem like a large percentage of schools. Such is capitalism. Efficient players win, inefficient players close their doors.

[richard_smith237]

3 minutes ago, Purdey said:

Doesn't seem like a large percentage of schools. Such is capitalism. Efficient players win, inefficient players close their doors.

 

Its more complex that this simplified approach...  the relationships between state schools and private schools is far more intertwined... 

 

The detrimental impact of the 'compulsory school system' is as it becomes overloaded.... 

... a 'shut down school' does not bring in the extra 20% VAT, so the students have to go somewhere.....  and that is at extra cost to the government. 

 

This is more myopic elitist rubbish from the Labor Government....   while on the surface it seems unfair that some children have greater advantage at Private Schools; which is why this policy was able to gain traction in the first place, Private Schooling eases the burden on State / Comprehensive schools and resoruces.

 

People can afford it ??  sure, the very wealthy can... But there are borer-line 'payers' who've sacrificed other things so that they can afford the private school and the 20% is the tipping point.

 

 

So, what happens... The Private schools open up more spaces to overseas students which is great for the government, bringing in overseas money....  Or, they can't get the students and they have to close...    The winner ???? the mediocrity and 'great leveller' - students who would otherwise excel in Private schools and held back, students who would do better in State Schools suffer a lack of resources... 

 

There is the Grammar Option of course - and competition for that is now perhaps the top 5 or 10% of British Students.... so impossible for many to get into... 

 

 

This government seems to be doing its utmost to drive the UK backwards.

[Chomper Higgot]

7 hours ago, Social Media said:

While some schools have not explicitly linked their closures to the VAT policy, many were already struggling with declining enrollment and financial deficits, leaving them vulnerable to the effects of the tax hike.

Once again the devil is in the details.

 

Already failing businesses fail.

 

 

[Bkk Brian]

23 minutes ago, Chomper Higgot said:

Once again the devil is in the details.

 

Already failing businesses fail.

 

 

Isn't it just............

 

7 hours ago, Social Media said:

Meanwhile, the Independent Schools Council (ISC) has launched a High Court challenge against the policy, arguing that it infringes on the human rights of some children. A judicial review hearing is scheduled for April 1-3. Julie Robinson, chief executive of the ISC, has cautioned that the policy’s impact will continue to grow in the coming months and years.  

 

[SunnyinBangrak]

If the private schools are all closing, where are the labour elite that caused the closures going to send their kids? State schools? Can their kids even speak Urdu??😅

[The Old Bull]

The real toffs won't be effected by this ,the Eaton and Harrow types have deep enough pockets. It's the wannabe toffs that will have a problem digging a little deeper.

[JonnyF]

28 minutes ago, SunnyinBangrak said:

If the private schools are all closing, where are the labour elite that caused the closures going to send their kids? State schools? Can their kids even speak Urdu??😅

 

The likes of Dianne Abbott have plenty of money to send their children to private schools even with the VAT.

 

Didn't do much good though.

 

https://www.dailymail.co.uk/news/article-7842415/Diane-Abbotts-privately-educated-son-28-charged-11-new-offences.html

 

[youreavinalaff]

30 minutes ago, The Old Bull said:

The real toffs won't be effected by this ,the Eaton and Harrow types have deep enough pockets. It's the wannabe toffs that will have a problem digging a little deeper.

People who work hard to send their kids to private school are not "wannabe toffs". They are simply good, caring parents who feel a private school will give their kids a better start.

[brewsterbudgen]

4 minutes ago, youreavinalaff said:

People who work hard to send their kids to private school are not "wannabe toffs". They are simply good, caring parents who feel a private school will give their kids a better start.

 

They are indeed.  But that's not a reason why they should be exempt from paying VAT!

[youreavinalaff]

3 minutes ago, brewsterbudgen said:

 

They are indeed.  But that's not a reason why they should be exempt from paying VAT!

I'm quite sure they do pay VAT. Everytime they go shopping. 

[brewsterbudgen]

4 minutes ago, youreavinalaff said:

I'm quite sure they do pay VAT. Everytime they go shopping. 

As they should when shopping for a school.

[The Old Bull]

10 minutes ago, youreavinalaff said:

People who work hard to send their kids to private school are not "wannabe toffs". They are simply good, caring parents who feel a private school will give their kids a better start.

I went to the local grammar school , all the sixth formers made it to University one even got a scholarship to Oxford. That's as good a start as you can get.

[youreavinalaff]

1 hour ago, The Old Bull said:

I went to the local grammar school , all the sixth formers made it to University one even got a scholarship to Oxford. That's as good a start as you can get.

Grammar schools aren't what they used to be. Most are only "Grammar" in name.

[MalcolmB]

Private schools make kids soft.

This generation needs to be a bit tougher, so a good policy.

[richard_smith237]

3 hours ago, Chomper Higgot said:

Once again the devil is in the details.

 

Already failing businesses fail.

 

You are right, the devil is most definitely in the details... 

 

They're schools... not businesses....    and any loss of a school has wider implications - taking a 'simple business approach' to such establishments highlights naivety and a complete lack of understanding of the issue created by this Labor Government.

[richard_smith237]

53 minutes ago, MalcolmB said:

Private schools make kids soft.

This generation needs to be a bit tougher, so a good policy.

 

Malcy going for Grade A1 dumb comment of the day again - thats quite a trophy cabinet you are filling... 

 

 

Approximately 70% of Englands Rugby Team come from Private Schools - Bunch of softies eh ?...

 

....  meanwhile while there's you... Hardman keyboard warrior stating you'd have beaten the Brit in Phuket far harder than that bouncer did....   

 

... Typical of Tough-man boomer stuck behind keyboard completely out of touch with this generation and any other... 

 

 

 

 

[jayboy]

56 minutes ago, MalcolmB said:

Private schools make kids soft.

This generation needs to be a bit tougher, so a good policy.

 

The spirits of the hundreds of thousands of public school educated officers in Valhalla who gave their lives for their country in war might raise their eyebrows at the 'soft' accusation.

[Nick Carter icp]

1 hour ago, MalcolmB said:

Private schools make kids soft.

This generation needs to be a bit tougher, so a good policy.

 

   Wonder who would be loading their guns and then running home fortheor tea ?

 

 

[roo860]

9 minutes ago, richard_smith237 said:

 

Malcy going for Grade A1 dumb comment of the day again - thats quite a trophy cabinet you are filling... 

 

 

Approximately 70% of Englands Rugby Team come from Private Schools - Bunch of softies eh ?...

 

....  meanwhile while there's you... Hardman keyboard warrior stating you'd have beaten the Brit in Phuket far harder than that bouncer did....   

 

... Typical of Tough-man boomer stuck behind keyboard completely out of touch with this generation and any other... 

 

 

 

 

Absolutely Richard, looks like he's been on a posting holiday and missed out on his trolling, had his trolling topic closed down yesterday, he's certainly proving what a total master baiter he really is.

[Chomper Higgot]

20 minutes ago, richard_smith237 said:

 

Malcy going for Grade A1 dumb comment of the day again - thats quite a trophy cabinet you are filling... 

 

 

Approximately 70% of Englands Rugby Team come from Private Schools - Bunch of softies eh ?...

 

....  meanwhile while there's you... Hardman keyboard warrior stating you'd have beaten the Brit in Phuket far harder than that bouncer did....   

 

... Typical of Tough-man boomer stuck behind keyboard completely out of touch with this generation and any other... 

 

 

 

 

You’re letting your imagination run away with you.

 

But if personal attacks from behind your own keyboard give you a sense of something you value or need in life, then  who am I to object?!

 

 

[richard_smith237]

27 minutes ago, Chomper Higgot said:

You’re letting your imagination run away with you.

 

But if personal attacks from behind your own keyboard give you a sense of something you value or need in life, then  who am I to object?!

 

Aligning yourself with Malcy eh... 

 

No imagination.... Private Schools don't make people soft... thats just a daft comment and usually one thats motivated for other reasons... 

[MalcolmB]

51 minutes ago, richard_smith237 said:

Approximately 70% of Englands Rugby Team come from Private Schools - Bunch of softies eh ?...

Ranked sixth in the world.

[Chomper Higgot]

Just now, richard_smith237 said:

 

Aligning yourself with Malcy eh... 

 

No imagination.... Private Schools don't make people soft... thats just a daft comment and usually one thats motivated for other reasons... 

I’ve never claimed Private Schools make people soft.

 

Take that up with whoever did.

[MalcolmB]

29 minutes ago, Chomper Higgot said:

You’re letting your imagination run away with you.

 

But if personal attacks from behind your own keyboard give you a sense of something you value or need in life, then  who am I to object?!

 

 

Water off a ducks back coming from Richard.

He lives to slag off people, says more about him than me.

 

My dad always told me if you don’t have something nice to say then it is better to say nothing at all.

 

[MalcolmB]

46 minutes ago, roo860 said:

Absolutely Richard, looks like he's been on a posting holiday and missed out on his trolling, had his trolling topic closed down yesterday, he's certainly proving what a total master baiter he really is.

The private school boys have been triggered, ironically proving my point.

[blaze master]

1 hour ago, MalcolmB said:

Private schools make kids soft.

This generation needs to be a bit tougher, so a good policy.

 

Didn't you say you came from old money? You'd be as soft as melted butter if that's the case.

 

Who you fooling. You went to the most posh schools out there Mr nails. 

[MalcolmB]

1 minute ago, blaze master said:

 

Didn't you say you came from old money? You'd be as soft as melted butter if that's the case.

 

Who you fooling. You went to the most posh schools out there Mr nails. 

Everyone seems to have missed I said…..

 

1 hour ago, MalcolmB said:

This generation

They were different back in my day. Teachers used to belt us. Made us tough. 

[richard_smith237]

51 minutes ago, roo860 said:

Absolutely Richard, looks like he's been on a posting holiday and missed out on his trolling, had his trolling topic closed down yesterday, he's certainly proving what a total master baiter he really is.

 

Just not in the same threads I guess.....