Private school closes due to VAT and NI tax raids on employment

In September, St Joseph’s Preparatory School, in Stoke-on-Trent, announced it would close at the end of the year because working-class parents could not afford it the government’s VAT raid.

Carrduss is a mixed school for children from 3 to 11 years old. It is owned by Tudor Hall, an independent boarding and day school for girls in Banbury.

Last week’s Budget confirmed that private schools would lose their VAT exemption and business rates relief, increasing costs that would have to be passed on to parents through higher rates. The additional tax burden will come into effect from January 1, 2025.

As a result, parents of children in private schools will see their fees increase analysis suggests this will increase by almost £2,000 per year annually.

Private schools lost more than 10,000 students in September prior to the change. According to the Independent Schools Council (ISC), the number of students attending private schools fell by 1.7 percent year-on-year in September, the equivalent of 10,540 fewer students.

Chancellor Rachel Reeves has said money from the decision will fund 6,500 new teachers in the state sector.

Ahead of the Budget, one of Labour’s own MPs warned that the attack on private schools was “simply not going to work” because the changes would push out children with special educational needs and disabilities who “have nowhere else to go.” MP Rachel Maskell said the state sector is not working for these children.

Labor has repeatedly defended the policy, saying ending tax breaks for private schools will help raise the revenue needed to fund next year’s education priorities.