Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of VAT on independent school fees on small independent faith schools, particularly those educating the children of Muslim families.

From 1 January 2025, the 20% standard rate of VAT will apply to all education services, vocational training, and boarding services provided by private schools for a charge. This will apply to any fees charged after 29 July 2024 for terms starting after 1 January 2025.

The government has thoroughly assessed the impacts of the VAT policy on small faith schools, including considering all of the evidence submitted through the consultation process. Based on the evidence provided, it is not apparent that small faith schools will be affected more by this policy than other schools.

The government closely examined proposals put forward for how small faith schools could be carved out of the policy, concluded that any carve out would reduce the amount of revenue raised from this policy, be unfair to those schools with fees just above the threshold, and would create many tax avoidance opportunities that would be difficult for HMRC to police.

Furthermore, it is the government’s position that state education is suitable for children of all faiths. All children of compulsory school age are entitled to a state-funded school place if they need one, and all schools are required to follow the Equality Act.

Further detail can be found in the summary responses published on GOV.UK.