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Labour PartyTaxes

End private schools’ VAT exemption and rates relief

“Labour will end the VAT exemption and business rates relief for private schools to invest in our state schools.”

Delivered2024 manifesto, page 82, 13 Jun 2024
  6. Delivered

Where it stands

VAT at 20% has applied to private school fees since 1 January 2025 (Finance Act 2025), and charitable business rates relief for private schools in England ended from the 2025-26 financial year (Non-Domestic Rating (Multipliers and Private Schools) Act 2025). Business rates are devolved outside England. The High Court dismissed a human rights challenge to the VAT change on 13 June 2025 and the Court of Appeal dismissed the appeals on 27 February 2026; the Supreme Court gave permission to appeal on 22 May 2026 and has listed a hearing for 1–2 December 2026. This card tracks the two tax changes, not how the money is spent.

What has happened

  1. Jun 2024Labour manifesto pledges to end the VAT exemption and business rates relief for private schools, Promised
  2. Oct 2024Autumn Budget 2024 confirms VAT on private school fees from 1 January 2025 and the end of charitable business rates relief for private schools in England from April 2025, In plan evidence
  3. Jan 2025VAT at 20% applies to private school education and boarding provided from 1 January 2025, Delivering evidence
  4. Mar 2025Finance Act 2025 (sections 47 to 49) receives Royal Assent, Legislated evidence
  5. Apr 2025Non-Domestic Rating (Multipliers and Private Schools) Act 2025 receives Royal Assent; section 5 removes charitable rate relief from private schools in England, Legislated evidence
  6. Apr 2025Both changes are in force: VAT since 1 January 2025, and the end of rates relief for the financial year from 1 April 2025, Delivered evidence

About the cost

Negative because the pledge raises money. Year used: 2028-29, the year Labour's costings use. Central is the official figure from Autumn Budget 2024, certified by the OBR: £1,665m from VAT plus £85m from business rates (£1.75bn). The other end of the range is Labour's own figure for the same year, £1,510m (manifesto page 127). Official figures for other years: £460m VAT in 2024-25 (part year); £1,505m VAT and £70m rates in 2025-26; £1,560m and £85m in 2026-27; £1,725m and £90m in 2029-30.

More detail

Sources (8)
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