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An unlikely alliance of independent schools, trade unions and tax experts are heaping pressure on Rachel Reeves to delay a tax raid on private education.
Fears are growing that if the government goes ahead with its plans to introduce VAT on school fees in the middle of the school year, it will cause job losses and put children’s education in chaos.
It comes as the government has insisted that it will stick with the plans, which were included in the Labour manifesto before the election, to help fund an extra 6,500 new teachers at state schools.
Reports over the weekend suggested that there had been a wobble on the issue, similar to what happened with the plan to tackle so-called non-doms, because it appeared that imposing VAT on private education would not raise as much money as previously thought. Details are expected to be confirmed in the Budget on 30 October.
Julie Robinson, chief executive of the Independent Schools Council, said: “Even those who are in favour of imposing VAT on the independent sector are saying that 1 January is not feasible.”
In response to the government consultation on the plan, teachers’ union the NASUWT warned of “a breakdown in opportunities”.
It said: “We request that a more reasonable time frame is proposed in order to implement the change fairly and without excessive disruption for teachers, pupils and parents.”
The Association of School and College Leaders said in its submission: “We would strongly recommend that the government undertakes and publishes a comprehensive impact assessment and a full consultation on these proposals before they are formalised in legislation, and that it delays their implementation until September 2025 at the earliest.”
Tax experts also warned that the plan will force schools to make complex changes on a short timescale.
The Chartered Institute of Taxation said: “We are concerned that neither HMRC nor the private schools will be ready to implement the change in VAT liability. As there is currently no tax information and impact note or published guidance, with an implementation date that is effectively shortened by schools closing mid-December, we recommend that the implementation date be delayed accordingly.”
The Association of Taxation Technicians added: “The proposed commencement date does not give sufficient time for schools or HMRC to adequately prepare and deliver the proposed changes. Commencing partway through an academic year could also introduce additional difficulties for schools and pupils. Consideration should be given to deferring commencement to September.”
The Treasury told The Independent over the weekend that the proposal will go ahead as planned.
However, No 10 was also forced to knock back concerns that charging VAT will not raise the money needed for 6,500 new teachers.
A Downing Street spokesperson said that “closing the loophole was in the manifesto” and that it “will raise the money needed for 6,500 new teachers”.
Previously, Ms Reeves has said she will “not be ideological” about tax changes if they do not work.
