Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate she has made of the price elasticity of demand for independent-sector education following a one-off increase in price of 20% (a) in the immediate term and (b) over time for (i) individual phases of education and (ii) on average across all phases.

As the Chancellor announced on 29 July, as of 1 January 2025, all education services and vocational training supplied by a private school in the UK for a charge will be subject to VAT at the standard rate of 20%. Boarding services closely related to such a supply will also be subject to VAT at 20%. Any fees paid from 29 July 2024 pertaining to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the government will legislate to remove their eligibility to business rates charitable rates relief.

The government will confirm the introduction of these tax changes at Budget. A Tax Information and Impact Note will be published alongside the Finance Bill once the independent Office for Budget Responsibility have scrutinised and certified the impacts of the final policy.