Asked by: Lord Lexden (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what assessment they have made of the scope under existing law for levying VAT on the fees charged by independent schools with charitable status.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The government has no plans to make changes to the VAT regime for independent schools. The VAT regime does not treat school fees differently based on whether schools have charitable status or not. All school fees are exempt from VAT.
The government has made no assessment of the scope under existing law for levying VAT on the fees charged by independent schools with charitable status. Other organisations, including EDSK, Baines Cutler Consulting, and Oxford Economics have published their own assessments related to this issue.
It is also worth noting that in practice, VAT on school fees would be passed on to parents. Schools would be required to pay the difference between the VAT they have charged to parents and the VAT they have themselves paid to other businesses.