ANALYSIS: VAT on private schools could end up costing taxpayers

Embargoed: 00:01, Monday 20th May 2024

*NOTE: This press release has been updated to make clear that the Conservative Party estimates are based on HM Treasury figures*

Revenue raised from imposing VAT on private school fees could almost entirely be lost as a result of the increased cost to the Treasury due to rising demand for state schools, according to analysis by the TaxPayers’ Alliance.

A survey by Saltus found that 26 per cent of children would have to be removed from their independent school in the event that VAT was imposed. This would amount to an additional 144,103 children potentially entering the state school system. At a cost of £7,690 per pupil, according to government figures, this would mean a £1.1 billion cost to the Treasury as a result of the policy.

Under Labour Party estimates, the policy would raise £1.7 billion. In this scenario, 65 per cent of revenue would be lost as a result of an increase in children entering state schools. Under Conservative Party estimates, which are based on HM Treasury figures, the policy would raise £950 million. In this scenario, over 123 per cent of revenue would be lost, meaning an annual cost of around £150 million to taxpayers.

The TaxPayers’ Alliance is calling on the Labour Party to rule out imposing VAT on private schools in the next parliament. 

Key findings:

  • State schools in England will receive £7,690 per pupil between the ages of 5-16 in 2024-25.

  • 26 per cent of children are estimated to be removed from private school in the event that VAT is imposed on fees, according to Saltus Wealth Index.

  • There are 554,243 pupils at 1,395 private schools as of 2023.

  • £1.1 billion would be the estimated cost to the Treasury if 26 per cent of children currently at private school entered the state school system.

  • The Labour Party estimate that VAT on private schools would raise £1.7 billion per year; the Conservative Party estimate, based on HM Treasury figures, that the policy would raise £950 million per year on average between 2025-26 and 2028-29.

  • Under Labour Party estimates, 65 per cent of revenues would be lost as a result of the increase in children entering state schools. Under Conservative Party estimates, based on HM Treasury figures, the figure would be 123 per cent, meaning a net loss to the Treasury.


Conservative estimate (using HM Treasury figures)

Labour estimate

Revenue raised by eliminating the VAT exemption for private
schools (£m)



Number of private school children removed from their schools



Cost of sending these children to state schools (£m)



Percentage of revenue raised spent on sending ex-private school children to state school (%)




John O’Connell, chief executive of the TaxPayers' Alliance, said:

“VAT on private schools is a clear cut case of a policy gimmick that will do grievous harm to families with potentially pathetic results for revenues.

“Politicians may talk of a level-playing field, but taxpayers won’t be fooled by proposals that simply punish ambition without even achieving its own objectives.

“Labour should abandon this disastrous policy.”


TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)


Media contact:

Elliot Keck
Head of Campaigns, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)


Notes to editors:

  1. Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at

  2. TaxPayers' Alliance's advisory council.

  3. The methodology is as follows:
    1. The figures in this release were calculated by multiplying the number of children attending private school (544,243) by the percentage of children expected to leave private schools if the VAT exemption is removed (26 per cent). This means 144,103 private school children are expected to be withdrawn.

    2. Per pupil funding allocated to schools for 5-16 year old pupils, in cash terms, in 2024-25 was £7,690 for England. For simplicity, this figure has been used for the whole of the UK, although funding per pupil in Scotland is actually higher, meaning this is likely to be an underestimate. In Wales and Northern Ireland the per pupil funding is similar to that in England. Multiplying this figure of £7,690 by 144,103 gets a sum of £1,108,152,070.

    3. The sum reached in note 4 is then divided by the amounts forecast by the Conservative (using HM Treasury figures) and Labour parties for how much removing the VAT exemption is expected to raise, and then multiplied by 100. This produces the percentage of revenue raised in the table. Over a four year period the Conservatives average annual revenue raised is £950 million, while Labour expect the policy to raise £1.7 billion.


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