The Welsh government plans to impose new taxes on private schools, potentially withdrawing their charitable status and adding to UK-wide VAT proposals.
- The initiative, led by Welsh finance secretary Mark Drakeford, could generate an additional £1.3 million annually by subjecting fee-paying schools to domestic rates.
- A similar move has already taken place in Scotland and is being considered in England, aligning Wales with these regions.
- Critics argue that these changes may lead to a significant decline in private school enrollment, burdening state schools and taxpayers.
- The Welsh government’s consultation on the matter will continue for 12 weeks, concluding on December 16.
Welsh finance secretary Mark Drakeford has unveiled plans to subject fee-paying schools in Wales to domestic rates, a shift expected to accrue £1.3 million annually. These proposed changes accompany UK-wide plans to introduce VAT on private school fees, which would equally impact Welsh institutions. By mirroring recent actions in Scotland and forthcoming adjustments in England, this initiative aims to create uniformity across regions.
Currently, 17 out of 83 private schools in Wales benefit from charitable non-domestic rates relief, a circumstance that Drakeford sees as providing an undue advantage. He argues that independent schools with charitable status should be treated similarly to non-charitable entities, channeling potential funds into local services. “We believe that independent schools with charitable status in Wales should be treated in the same way as those which are not charities,” Drakeford stated, underscoring the fairness aspect of the proposal.
However, apprehensions have been expressed regarding the potential fallout of these changes. Sir Keir Starmer’s proposed VAT addition to private school fees might trigger a downturn in enrollment at these institutions. A Saltus Wealth Index report reveals that nearly 23% of parents are contemplating withdrawing their children from private education, which could relocate approximately 140,000 students into state schools throughout England and Wales.
Critics highlight the risk of overwhelming the public education system, which might already be stretched thin. Tom Giffard, Welsh Conservative shadow education minister, has labeled these measures as short-sighted. He cautions that there would be an increase in class sizes and added pressure on teaching staff, inevitably escalating costs for taxpayers.
The consultation period initiated by the Welsh government to discuss the removal of charitable status for private schools will last for 12 weeks, closing on December 16.
The proposed changes in tax policy for private schools in Wales have sparked significant debate, with potential implications for both private and public education sectors.
