Labour and the Conservatives are at odds over whether private schools should continue to enjoy tax exemptions. The opposition’s proposal to remove the schools’ charitable status and impose VAT on fees has been criticised by the government as anti-aspirational.
Around 1,300 of the UK’s 2,300 private schools have charitable status, which gives them tax advantages that are estimated to amount to between £1.7bn and £3bn a year. The government maintains that independent schools deserve this because they further educational opportunities by sharing resources and expertise with state schools and providing educational bursaries.
Critics argue that private schools do not need tax breaks because they make plenty of money through fees, with several prestigious schools charging parents close to £50,000 a year. The 20 per cent VAT exemption, they argue, gives an unfair tax advantage to some of the country’s wealthiest people. According to the Institute for Fiscal Studies, three quarters of the pupils attending private schools come from families in the three top income deciles, and most of those are from the top decile.
The fees at top private schools can be well in excess of median earnings. Annual fees at nine of the country’s top private schools exceeded the annual median wage, which was £33,000 in 2022. The average annual fee at the 947 day schools included in the Independent School Council’s 2022 annual report was £15,654, around half the median annual wage. The average boarding school fee was £37,032.
[See also: By protecting private schools, Rishi Sunak is chasing voters who don’t exist]
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