Written questions by Hinds.

Whether summer schools which are operated by (a) an independent school on its own site and (b) a third party on an independent school site will be liable for VAT; and whether the liability is changed if a significant part of the course content is English language tuition.

The draft legislation set out the definition of private schools within the scope of this policy. This includes Welsh language schools if they provide full-time education for children of compulsory school age and/or full-time education for a fee to 16-19 year olds and are principally concerned with providing education suitable for that age range (for instance, a sixth form) for a charge. All education, vocational training, and boarding provided by a private school for a charge will be within scope of this policy, including educational summer schools run by a private school. However, if the summer school purely consists of childcare and is not educational in nature, it will remain exempt from VAT, as welfare services are exempt from VAT. For VAT purposes, education means a course, lesson, instruction, or study in any subject (whether or not that subject is normally taught in schools, colleges, or universities), regardless of where and when it takes place. As well as academic subjects, this includes activities such as performing arts, physical training, sports, and arts & crafts Summer schools run by third-party providers on a private school's premises are not impacted by these changes. Summer schools run by third-parties have always been subject to VAT if the provider was registered and the summer school didn't qualify for the welfare VAT exemption. Based on the draft legislation, the degree to which a summer school consists of English language tuition does not affect its VAT treatment. The final policy design will be confirmed at the Budget on 30 October.

Pursuant to the Answer of 2 August 2024 to Question 1651 on Private Education: VAT, whether independent Welsh language schools will be exempt from VAT.

The draft legislation set out the definition of private schools within the scope of this policy. This includes Welsh language schools if they provide full-time education for children of compulsory school age and/or full-time education for a fee to 16-19 year olds and are principally concerned with providing education suitable for that age range (for instance, a sixth form) for a charge. All education, vocational training, and boarding provided by a private school for a charge will be within scope of this policy, including educational summer schools run by a private school. However, if the summer school purely consists of childcare and is not educational in nature, it will remain exempt from VAT, as welfare services are exempt from VAT. For VAT purposes, education means a course, lesson, instruction, or study in any subject (whether or not that subject is normally taught in schools, colleges, or universities), regardless of where and when it takes place. As well as academic subjects, this includes activities such as performing arts, physical training, sports, and arts & crafts Summer schools run by third-party providers on a private school's premises are not impacted by these changes. Summer schools run by third-parties have always been subject to VAT if the provider was registered and the summer school didn't qualify for the welfare VAT exemption. Based on the draft legislation, the degree to which a summer school consists of English language tuition does not affect its VAT treatment. The final policy design will be confirmed at the Budget on 30 October.

With reference to paragraph 4.7 of her Department's Technical Note entitled Applying VAT to Private School Fees and Removing the Business Rates Charitable Rates Relief for Private Schools, published in July 2024, on what evidential basis the Government expects increased rates liabilities to have a limited impact on average school fees per pupil.

Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, details of the Government’s assessment of the expected impacts of the removal of charitable rates relief from private schools in England will be published at the Budget on October 30 in the usual way.

Whether it is her policy that independent schools part-funded by overseas governments will be exempt from paying VAT.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools. Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the Government will legislate to remove their eligibility to business rates charitable rate relief. This is intended to take effect from April 2025, subject to Parliamentary passage. This includes independent schools, part-funded by overseas governments, bi-lingual schools, and faith schools. The final policy design will be confirmed at the Budget. A technical note setting out the details, alongside draft VAT legislation, was published in July and is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools. Business rates are administered by local government. Therefore, local authorities are responsible for determining eligibility for reliefs, including with respect to dual-use locations. Charitable rates relief is available to properties deemed to be ‘wholly or mainly’ used for charitable purposes. Certain properties are exempt from business rates including buildings that are places of public religious worship and buildings used for the training and/or welfare of disabled persons. The Valuation Office Agency (VOA) is responsible for determining whether a property meets the necessary legal requirements to be exempt. Details on final policy decisions regarding the removal of private schools’ eligibility for charitable rate relief will be set out at the Budget.The Government has carefully considered the impact that changes to the tax treatment of private schools will have on pupils and their families across both the state and private sector, as well as the impact they will have on state and private schools. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, the Government will confirm its approach to these reforms at the Budget on 30 October, and set out its assessment of the expected impacts of these policy changes in a Tax Information and Impact Note (TIIN). TIINs give a clear explanation of the policy objective, including details of the tax impact on the Exchequer, business, individuals and any equalities impacts.These changes will not affect the VAT status of FE Colleges. Maintained schools are funded by local authorities, who are able to recover their VAT through the s33 VAT refund scheme, which aims to ensure VAT is not a burden on local taxation. Academies can also recover their VAT under s33B, to ensure they are not disincentivised from leaving LA control. FE colleges do not meet the rationale for admission to either refund scheme.

Whether charged-for education provided in (a) church premises and (b) other dual-use locations that are charitably exempt will be liable for (i) VAT and (ii) business rates.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools. Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the Government will legislate to remove their eligibility to business rates charitable rate relief. This is intended to take effect from April 2025, subject to Parliamentary passage. This includes independent schools, part-funded by overseas governments, bi-lingual schools, and faith schools. The final policy design will be confirmed at the Budget. A technical note setting out the details, alongside draft VAT legislation, was published in July and is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools. Business rates are administered by local government. Therefore, local authorities are responsible for determining eligibility for reliefs, including with respect to dual-use locations. Charitable rates relief is available to properties deemed to be ‘wholly or mainly’ used for charitable purposes. Certain properties are exempt from business rates including buildings that are places of public religious worship and buildings used for the training and/or welfare of disabled persons. The Valuation Office Agency (VOA) is responsible for determining whether a property meets the necessary legal requirements to be exempt. Details on final policy decisions regarding the removal of private schools’ eligibility for charitable rate relief will be set out at the Budget.The Government has carefully considered the impact that changes to the tax treatment of private schools will have on pupils and their families across both the state and private sector, as well as the impact they will have on state and private schools. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, the Government will confirm its approach to these reforms at the Budget on 30 October, and set out its assessment of the expected impacts of these policy changes in a Tax Information and Impact Note (TIIN). TIINs give a clear explanation of the policy objective, including details of the tax impact on the Exchequer, business, individuals and any equalities impacts.These changes will not affect the VAT status of FE Colleges. Maintained schools are funded by local authorities, who are able to recover their VAT through the s33 VAT refund scheme, which aims to ensure VAT is not a burden on local taxation. Academies can also recover their VAT under s33B, to ensure they are not disincentivised from leaving LA control. FE colleges do not meet the rationale for admission to either refund scheme.

Whether it is her policy that bi-lingual schools will be exempt for paying (a) VAT and (b) business rates.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools. Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the Government will legislate to remove their eligibility to business rates charitable rate relief. This is intended to take effect from April 2025, subject to Parliamentary passage. This includes independent schools, part-funded by overseas governments, bi-lingual schools, and faith schools. The final policy design will be confirmed at the Budget. A technical note setting out the details, alongside draft VAT legislation, was published in July and is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools. Business rates are administered by local government. Therefore, local authorities are responsible for determining eligibility for reliefs, including with respect to dual-use locations. Charitable rates relief is available to properties deemed to be ‘wholly or mainly’ used for charitable purposes. Certain properties are exempt from business rates including buildings that are places of public religious worship and buildings used for the training and/or welfare of disabled persons. The Valuation Office Agency (VOA) is responsible for determining whether a property meets the necessary legal requirements to be exempt. Details on final policy decisions regarding the removal of private schools’ eligibility for charitable rate relief will be set out at the Budget.The Government has carefully considered the impact that changes to the tax treatment of private schools will have on pupils and their families across both the state and private sector, as well as the impact they will have on state and private schools. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, the Government will confirm its approach to these reforms at the Budget on 30 October, and set out its assessment of the expected impacts of these policy changes in a Tax Information and Impact Note (TIIN). TIINs give a clear explanation of the policy objective, including details of the tax impact on the Exchequer, business, individuals and any equalities impacts.These changes will not affect the VAT status of FE Colleges. Maintained schools are funded by local authorities, who are able to recover their VAT through the s33 VAT refund scheme, which aims to ensure VAT is not a burden on local taxation. Academies can also recover their VAT under s33B, to ensure they are not disincentivised from leaving LA control. FE colleges do not meet the rationale for admission to either refund scheme.

Whether health and social care charges for students at special schools and colleges will be exempt from VAT.

The removal of the VAT exemption for private school fees will not impact pupils with the most acute additional needs, where these can only be met in private schools. Local Authorities (LAs) fund pupils’ places in private schools where their needs can only be met in a private institution. In England, where attendance at that private institution is required by a child’s Education, Health and Care Plan (EHCP), LAs will be able to reclaim the VAT on the fees from HMRC. This includes at post-16 special colleges.Where a single fee is paid for students at special schools or colleges to cover all aspects of the service they provide (including health and social care), the VAT status of that fee will be determined by whether the predominant element of the supply is education. HMRC will publish further guidance to assist schools before the Budget. The Government will confirm the introduction of these tax policy changes at Budget, at which point the Office for Budget Responsibility (OBR) will certify the Government’s costings for these measures. We expect the changes to raise significant amounts of revenue, securing additional funding to help deliver the Government’s commitments relating to education and young people.

Pursuant to the Answer of 9 September 2024 to Question 2809 on Private Education: Taxation, whether the tax information and impact note will include an assessment of the potential impact of this policy on different religious faiths.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools. Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the Government will legislate to remove their eligibility to business rates charitable rate relief. This is intended to take effect from April 2025, subject to Parliamentary passage. This includes independent schools, part-funded by overseas governments, bi-lingual schools, and faith schools. The final policy design will be confirmed at the Budget. A technical note setting out the details, alongside draft VAT legislation, was published in July and is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools. Business rates are administered by local government. Therefore, local authorities are responsible for determining eligibility for reliefs, including with respect to dual-use locations. Charitable rates relief is available to properties deemed to be ‘wholly or mainly’ used for charitable purposes. Certain properties are exempt from business rates including buildings that are places of public religious worship and buildings used for the training and/or welfare of disabled persons. The Valuation Office Agency (VOA) is responsible for determining whether a property meets the necessary legal requirements to be exempt. Details on final policy decisions regarding the removal of private schools’ eligibility for charitable rate relief will be set out at the Budget.The Government has carefully considered the impact that changes to the tax treatment of private schools will have on pupils and their families across both the state and private sector, as well as the impact they will have on state and private schools. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, the Government will confirm its approach to these reforms at the Budget on 30 October, and set out its assessment of the expected impacts of these policy changes in a Tax Information and Impact Note (TIIN). TIINs give a clear explanation of the policy objective, including details of the tax impact on the Exchequer, business, individuals and any equalities impacts.These changes will not affect the VAT status of FE Colleges. Maintained schools are funded by local authorities, who are able to recover their VAT through the s33 VAT refund scheme, which aims to ensure VAT is not a burden on local taxation. Academies can also recover their VAT under s33B, to ensure they are not disincentivised from leaving LA control. FE colleges do not meet the rationale for admission to either refund scheme.

Whether students at post 16 special colleges who have an Education, Health and Care plan will be exempt from VAT on college fees.

The removal of the VAT exemption for private school fees will not impact pupils with the most acute additional needs, where these can only be met in private schools. Local Authorities (LAs) fund pupils’ places in private schools where their needs can only be met in a private institution. In England, where attendance at that private institution is required by a child’s Education, Health and Care Plan (EHCP), LAs will be able to reclaim the VAT on the fees from HMRC. This includes at post-16 special colleges.Where a single fee is paid for students at special schools or colleges to cover all aspects of the service they provide (including health and social care), the VAT status of that fee will be determined by whether the predominant element of the supply is education. HMRC will publish further guidance to assist schools before the Budget. The Government will confirm the introduction of these tax policy changes at Budget, at which point the Office for Budget Responsibility (OBR) will certify the Government’s costings for these measures. We expect the changes to raise significant amounts of revenue, securing additional funding to help deliver the Government’s commitments relating to education and young people.

What criteria her Department plans to use to classify schools as English language schools for the purposes of determining an exemption from VAT.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools. Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Furthermore, where a school in England has charitable status, the Government will legislate to remove their eligibility to business rates charitable rate relief. This is intended to take effect from April 2025, subject to Parliamentary passage. This includes independent schools, part-funded by overseas governments, bi-lingual schools, and faith schools. The final policy design will be confirmed at the Budget. A technical note setting out the details, alongside draft VAT legislation, was published in July and is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools. Business rates are administered by local government. Therefore, local authorities are responsible for determining eligibility for reliefs, including with respect to dual-use locations. Charitable rates relief is available to properties deemed to be ‘wholly or mainly’ used for charitable purposes. Certain properties are exempt from business rates including buildings that are places of public religious worship and buildings used for the training and/or welfare of disabled persons. The Valuation Office Agency (VOA) is responsible for determining whether a property meets the necessary legal requirements to be exempt. Details on final policy decisions regarding the removal of private schools’ eligibility for charitable rate relief will be set out at the Budget.The Government has carefully considered the impact that changes to the tax treatment of private schools will have on pupils and their families across both the state and private sector, as well as the impact they will have on state and private schools. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, the Government will confirm its approach to these reforms at the Budget on 30 October, and set out its assessment of the expected impacts of these policy changes in a Tax Information and Impact Note (TIIN). TIINs give a clear explanation of the policy objective, including details of the tax impact on the Exchequer, business, individuals and any equalities impacts.These changes will not affect the VAT status of FE Colleges. Maintained schools are funded by local authorities, who are able to recover their VAT through the s33 VAT refund scheme, which aims to ensure VAT is not a burden on local taxation. Academies can also recover their VAT under s33B, to ensure they are not disincentivised from leaving LA control. FE colleges do not meet the rationale for admission to either refund scheme.

What estimate her Department has made of the annual cost to HM Revenue and Customs of reimbursing VAT to local councils for pupils with education, health and care (EHC) plans.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools.Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Private schools that are not currently registered for VAT will be able to register after 30 October. Further guidance can be found on the GOV.UK website here: Charging and reclaiming VAT on goods and services related to private school fees - GOV.UK (www.gov.uk) The Government’s forecast of the revenue raised from these changes will be scrutinized by the independent Office for Budget Responsibility before being published at Budget on 30 October. Details of the Government’s assessment of the expected impacts of these policy changes will also be published at Budget in the usual way. The Government has considered the policy’s interaction with Human Rights law, and is confident that it is compatible with the UK’s obligations under the Human Rights Act.

Whether she has received legal advice on the compatibility of plans to charge VAT on independent school fees with Articles (a) 2 and (b) 14 of the European Convention on Human Rights.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools.Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Private schools that are not currently registered for VAT will be able to register after 30 October. Further guidance can be found on the GOV.UK website here: Charging and reclaiming VAT on goods and services related to private school fees - GOV.UK (www.gov.uk) The Government’s forecast of the revenue raised from these changes will be scrutinized by the independent Office for Budget Responsibility before being published at Budget on 30 October. Details of the Government’s assessment of the expected impacts of these policy changes will also be published at Budget in the usual way. The Government has considered the policy’s interaction with Human Rights law, and is confident that it is compatible with the UK’s obligations under the Human Rights Act.

How much revenue to the Exchequer was raised from (a) VAT, (b) business rates, (c) employer contributions to the teachers' pension scheme and (d) any other source paid by the independent school sector in the 2023-24 financial year; and what estimate her Department has made of the revenue that will be raised in the (i) 2025-26 and (ii) 2026-27 financial year.

On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools.Any fees paid from 29 July 2024 relating to the term starting in January 2025 onwards will be subject to VAT. Private schools that are not currently registered for VAT will be able to register after 30 October. Further guidance can be found on the GOV.UK website here: Charging and reclaiming VAT on goods and services related to private school fees - GOV.UK (www.gov.uk) The Government’s forecast of the revenue raised from these changes will be scrutinized by the independent Office for Budget Responsibility before being published at Budget on 30 October. Details of the Government’s assessment of the expected impacts of these policy changes will also be published at Budget in the usual way. The Government has considered the policy’s interaction with Human Rights law, and is confident that it is compatible with the UK’s obligations under the Human Rights Act.