The Jewish schools’ network PaJeS has said it has met with Treasury officials to express disappointment at confirmation by Rachel Reeves in the budget that private schools will be subject to VAT on fees from the start of 2025.
The announcement, which had been widely expected, also saw the government removing the tax benefits previously linked to the charitable status of all private schools in the UK.
A statement released by Chinuch UK, a representative body for Charedi Strictly Orthodox Jewish schools in the aftermath of Wednesday’s budget announcement, also warned the January 2025 implementation, “leaves the sector with very little preparation time”.
Rachel Reeves praised Education Secretary Bridget Phillipson’s policy as she delivered her budget on Wednesday saying:”To provide the highest quality of support and teaching that they deserve, we will introduce VAT on private school fees from January 2025 and we will shortly introduce legislation to remove their business rates relief from April 2025, too.”
The chancellor added:”“I can confirm today that they will in fact raise over £9bn to support our public services and restore our public finances. That is a promise made and a promise fulfilled.”
Rachel Reeves delivers budget
She praised the education secretary for her determination to raise standards in the state sector.
While introducing tough measures of the private sector Phillipson has shown herself to be a strong supporter of Jewish faith schools such as JFS and JCoss.
PaJeS, who had claimed earlier this year that the measures were a threat to the future of the independent Jewish sector, held their meeting with the Treasury shortly after Reeves had concluded her hard-hitting budget, aimed at restoring the country’s economic stability.
PaJeS assistant director Raisel Friedman told Jewish News it was still “tricky to unpick” the budget, but added:“We are further disappointed that the 60 per cent of Jewish schools in the independent sector have not been given due consideration in the government’s response to the consultation over VAT and business rates relief.”
But in their post-budget update Chinuch UK confirmed that “several schools” had approached them over “consideration of entry into the state-funded sector” but added there were “practical obstacles to transition from independent to state-maintained status.”
These included the “schools’ ability to meet all independent standards” while they added a “second major obstacle concerns schools’ staff qualification levels and whether these are similar to state schools.”
Away from the large and successful Jewish state schools such as JFS and JCOSS most schools serving the community are independent, serving the strictly Orthodox sector in particular.
The Institute for Jewish Policy Research suggests around 30 per cent of school-age children in Hackney are in Charedi independent schools.
Of the more costly private schools in the Jewish sector Immanuel College in Bushey, charged nearly £24,000 from September 2024, while a school such as Naima JPS in Maida Vale, west London, charges fees of £16,350 a year.
Supporters of the government’s measures claimt suggestions that VAT on fees will leave thousands of parents unable to afford to send their children to private schools are overstated.
They point to the fact that many private schools have introduced steep increases in fees over the past 20 years, but this has resulted in only a minimal drop in applications by parents of new pupils.
Ministers have said they did not expect raising VAT would cause private school fees to go up by 20%, as they did not have to reflect the increase in what they charged.
The government’s supporters suggest there is little evidence to suggest that the introduction of VAT on fees will prompt a huge dip in applications from parents already wealthy enough to absorb a rise in total cost.
But it is a different story among the Charedi school sector, with the highest nominal fee charges are around £6,000 a year, but many Strictly Orthodox parents are unable to pay fees, with schools running on voluntary contributions.
In an analysis published by the Treasury it is pointed out that because smaller faith schools rely on “voluntary donations in addition to, or instead of compulsory fees” these “donations are not subject to VAT”.
Supporters of the government’s policy also suggest that some Charedi schools are avoiding making a move to the state-funded sector in order to survive because of concerns they will have to teach subjects and material around equality and LGBT issues.
Independent schools are also entitled to further claim back VAT refunds on capital projects and educational supplies, in measures that will further help them offset some of the drop in numbers of those wanting to send their children to private schools.
Dialogue with the treasury is now likely to continue as representatives of the Jewish independent schools seek to offset the impact of the government’s decision to remove the tax benefits previously linked to the charitable status of all private schools in the UK.
