Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether independent education settings for people over the age of 19 will be VAT-exempt.

As set out in our manifesto and confirmed in the Chancellor’s July statement, we are ending the VAT break for private schools. The government will introduce 20% VAT on education and boarding services provided for a charge from 1 January 2025.

As per the draft VAT legislation that was published in July, the new VAT charge will apply to education and vocational training provided either at sixth forms attached to private schools or standalone private sixth form colleges. However, education and vocational training provided by further education colleges, which are classified as public sector institutions, will not be subject to VAT. The Government will confirm the final policy design at the Budget.

Support is available to all educational institutions to help them understand any new tax liabilities that result from these changes; alongside existing support for businesses, bespoke HMRC guidance is available online and this will be complemented with webinars intended to talk schools through the steps they will need to take to comply with any new tax liabilities.

The change will not impact pupils with the most acute additional needs, where these can only be met in private schools. Where pupils’ places in private schools are being funded by local authorities (LAs) because their needs can only be met in private school (e.g. in England, where attendance at that private school is required by a child’s Education, Health and Care Plan (EHCP)), LAs will be able to reclaim the VAT so it does not apply to those fees.