Labour has clarified that it will not revoke charitable status from private schools if it comes to power, aiming to clarify its position on independent education. The party had previously stated that removing charitable status from these schools would generate approximately £1.7bn in tax revenue. However, Labour now asserts that it can enforce tax obligations on private schools by mandating VAT and business rates without the need to change the law or remove charitable status. This clarification comes after criticism and confusion over the party’s proposals. Some independent schools may welcome this softened approach, as they would retain tax exemptions under charitable status.
Labour’s education mission document states that the party intends to impose VAT on private schools and remove their business rates exemption, but does not mention revoking charitable status. Despite this, comments by senior party members have caused confusion. Labour maintains that it will eliminate unfair tax breaks benefiting private schools in order to fund educational necessities like more teachers and mental health counseling in secondary schools. The party’s decision not to pursue stripping charitable status from these schools may alleviate concerns from the private school sector. Meanwhile, Luke Sibieta from the Institute for Fiscal Studies believes that focusing on exemptions for VAT and business rates is not surprising, as removing charitable tax status would be a lengthier and less effective process to generate additional tax revenue.
In summary, Labour has clarified its position on private schools’ charitable status, indicating that it will not remove it if it comes to power. Instead, the party plans to enforce tax obligations by mandating VAT and business rates, without changing the law or revoking charitable status. The decision comes after confusion over Labour’s previous statements, and the party’s education mission document does not mention removing charitable status. This revised stance may be welcomed by some independent schools, as they would retain tax exemptions under their charitable status.