Private school closes because of Labour VAT and NI tax raids

Private school closes because of Labour VAT and NI tax raids

An independent school in Oxfordshire has said it is closing down because of Labour’s VAT and National Insurance tax raids.

In a statement to parents, the governors of Carrdus School in Banbury warned that the combination of Labour’s tax increases, including adding VAT to school fees, had left parents with no option but to withdraw their children from the prep school.

It also blamed the increase on employer’s National Insurance contributions announced by Rachel Reeves, the Chancellor, at the Autumn Budget.

As a result, the school is likely to close in Spring next year “unless a commercial solution can be found” and its focus is now on securing places for children at other schools, it said.

In their statement, the governors of Carrdus said: “The introduction of VAT on independent school fees mid-academic year, further compounded by the loss of charitable business rates relief and the increase in employers’ National Insurance contributions, has put a great deal of pressure on parents and schools.

“Consequently, a number of Carrdus parents have been left with no alternative option but to give notice to withdraw their child from the school either at the end of the autumn term, or at the end of the academic year.”

Carrdus is the latest independent school to announce it is being forced to close as a result of Labour’s tax raid on the sector.

If it closes next year, Carrdus will be the tenth school to shut since The Telegraph revealed the closure of Alton School in Hampshire in May.

Fees at Carrdus range from £2,811 a year to £14,985 a year. Raising fees by 20 per cent to cover the tax increases would cost some parents an additional £3,000 annually.

In September, St Joseph’s Preparatory School, in Stoke-on-Trent, announced it was closing at the end of the year saying its working-class parents could not afford the Government’s VAT raid.

Carrdus is a co-educational school for children aged 3-11. It is owned by Tudor Hall, an independent girls’ boarding and day school in Banbury.

Increased tax burden

Last week’s Budget confirmed that private schools would lose their VAT exemption and business rate relief, pushing up costs that will need to be passed on to parents via higher fees. The additional tax burden comes into place from Jan 1 2025.

As a result, parents of private school children will see their fees rise by nearly £2,000 per year on average, analysis suggests.

Private schools lost more than 10,000 pupils in September ahead of the change. The number of students attending private schools fell by 1.7 per cent year-on-year in September, the equivalent of 10,540 fewer students, according to the Independent Schools Council.

Ms Reeves has said the money from the decision will fund 6,500 new teachers in the state sector.

‘Simply not going to work’

Ahead of the budget, Rachael Maskell, the Labour MP for York Central warned that the raid on private schools is “simply not going to work” as the changes would force out children with special educational needs and disabilities who have “nowhere else to go”.

Laura Trott, the shadow secretary of state for education, said: “This is further evidence that Labour’s ideological raid on private schools will just create more pressure for the state system. I am so sorry for the children who are being moved out of their school mid-year, disrupting their education because a Labour Government wants to make a political point.”

Labour has repeatedly defended the policy, saying ending tax breaks on private schools will help to raise the revenue needed to fund our education priorities for next year.

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