Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the (a) removal of the VAT exemption and (b) increase in (i) business rates, (ii) the minimum wage and (iii) National Insurance contributions on specialist (A) music and (B) dance schools.

The Government recognises the value that music and dance schools bring to education in the UK.

In advance of Autumn Budget 2024, the Government conducted thorough and detailed analysis of the impacts of applying VAT to private school fees and the removal of business rates charitable rate relief from private schools in England, including on Music and Dance schools.

The Department for Education provides means-tested bursaries for eligible families as part of the Music and Dance Scheme (MDS) if their child has a place at any one of eight MDS performing arts private schools. The Department adjusted MDS bursary contribution for families with a relevant income below £45,000 to account for VAT on fees, ensuring that the total parental fee contributions for families with below average relevant incomes remain unchanged for the 2024/25 academic year.

The Employment Allowance has been more than doubled to £10,500, ensuring that over half of businesses with National Insurance liabilities, including those providing specialist education in music and dance, will either gain or see no change this year.

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.

The National Minimum Wage and National Living Wage rates are recommended by the independent and expert Low Pay Commission (LPC). By seeking advice from the LPC when setting the minimum wage rates, the Government is able to ensure that the right balance is struck between the needs of workers, affordability for employers, including those in the education sector, and the impact on the economy. DBT have published their full Impact Assessment alongside the legislation here: https://www.legislation.gov.uk/ukdsi/2025/9780348268492/impacts