Budget Resolution No. 34: Value added tax (private school fees)

Parliament voted on 6 November 2024 to approve Budget Resolution No. 34, which removes the VAT exemption that has historically applied to private school fees. The resolution passed by 383 votes to 184, with the government commanding a comfortable majority. The measure means that independent schools in England, Wales, and Scotland will be subject to the standard 20 percent rate of VAT on their fees, a change the government had signalled as a central plank of its first Budget under Chancellor Rachel Reeves.

The practical effect of the resolution is to make private school fees substantially more expensive, since schools will either absorb the VAT or pass it on to parents. The government argues this will raise significant revenue to be reinvested in state education, including hiring additional teachers. Critics argue it will push some pupils out of private schools and into an already-stretched state sector, negating the financial benefit and reducing the options available to families who stretch their budgets to pay fees.

The vote divided almost entirely along party lines. All 329 Labour MPs and all 35 Labour and Co-operative MPs voted in favour, as did the Scottish National Party, Plaid Cymru, and the Green Party. Every Conservative MP who voted opposed the resolution, as did all voting Liberal Democrats, Reform UK members, and the Democratic Unionist Party. The Liberal Democrats' opposition is notable given that the party had previously indicated some openness to taxing private schools; their decision to vote against placed them alongside the Conservatives on this occasion. The measure forms part of a broader legislative push that has continued into 2025, with related votes on business rates for private schools and on the Children's Wellbeing and Schools Bill following in subsequent months.