Considering a house move to dodge an increase in private school fees by the Labour Party?

Considering a house move to dodge an increase in private school fees by the Labour Party?

The Labour Party's manifesto for the general election includes a policy that is causing quite a stir - the levy of Value Added Tax (VAT) on private school fees. This proposal, considered one of the party's more controversial ones, could have significant implications for both private schools and families with children in the private sector.

If implemented, schools would be required to add VAT to their fees. For an average day fee of £6,021 per term, or £18,064 for the year, the additional cost could amount to £28,000 over seven years. Schools, some of which are already experiencing funding losses and potential closures due to the proposals, may pass these costs onto parents.

Parents are already taking steps to prepare for the potential rise in fees. A quarter of them would be forced to remove their child or children from the private sector completely and instead send them to the local state school. Research by wealth manager Saltus found that 50% of parents would have to make changes, either moving from boarding to becoming a day pupil or taking their children from their current school and enrolling in a cheaper one, to keep their child or children in private education.

Estate agents predict an increase in demand for properties near good state schools, leading to a 20% premium on home prices. However, the cost of moving homes may not always be less than the estimated additional £28,000 over seven years of private schooling.

Dominic Agace, chief executive at Winkworth, suggests a rise in parents opting for a hybrid version of private and state schools. This could involve children attending state schools during the day and private schools for after-school activities or tuition.

Sarah Coles, head of personal finance for Hargreaves Lansdown, advises exploring school-specific discounts, especially for academically gifted children or those excelling in music, drama, or sports. Schools often offer discounts for siblings, staff members, and specific jobs such as the clergy or armed forces.

Considering a trust, either bare trusts or education trusts, might help manage the costs of school fees. However, there is no direct estimate from the search results about the possible increase in fees for private schools if VAT is added; the information mainly discusses VAT exemptions for certain educational services but does not specify estimated fee increases for private schools.

Critics claim that adding VAT to private school fees will cause private institutions to close and put extra pressure on the state sector. The Labour Party argues that this will help boost the quality of other schools by redistributing resources. The change isn't expected until September 2025, providing time for schools and families to adjust.

As the election approaches, this proposal remains a hot topic of debate, with implications for both the private and state education sectors.

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