Drakeford plans new tax hit on private schools in Wales

Private schools in Wales are likely to lose their charitable status from April 2024 under new proposals put forward by the Welsh Labour government.

The move will require fee-paying schools to pay local taxes, a change that is expected to bring in an extra £1.3m a year. It follows UK-wide plans to introduce VAT on private school fees, which will also affect Welsh schools.

Welsh Finance Minister Mark Drakeford has claimed the proposed changes would bring Wales in line with Scotland, where private schools are set to lose their charitable status in 2022, and would be in line with similar moves planned in England. Currently, 17 of Wales’ 83 private schools receive charitable relief from non-local tax, which Drakeford believes creates an unfair advantage.

“We believe that independent schools with charitable status in Wales should be treated in the same way as schools that are not charitable,” Drakeford said, justifying the proposal as a way of redirecting money to local services.

However, concerns have been raised that these tax changes, including Sir Keir Starmer’s proposed VAT on private school fees, could lead to a significant drop in private school enrolment. A recent report by Saltus Wealth Index found that nearly 23% of parents could withdraw their children from private education, potentially shifting 140,000 children to state schools across England and Wales. Critics claim this would overburden the public education system and lead to higher costs for the taxpayer.

Tom Giffard, the Welsh Conservative shadow education secretary, has criticised the proposals as short-sighted, warning that pushing children into the already strained state school system would increase class sizes and put further pressure on teaching staff.

The Welsh Government’s consultation on removing the charitable status of private schools is due to run for 12 weeks until 16 December.