Private schools in Wales could lose their charitable status from April 2024 under new proposals set out by the Welsh Labour government.
The move would require fee-paying schools to pay domestic rates, a change expected to bring in an additional £1.3 million per year. This comes on top of UK-wide plans to impose VAT on private school fees, which will also affect Welsh schools.
Mark Drakeford, the Welsh finance secretary, contended that the suggested modifications would harmonize Wales with Scotland, which stripped private schools of their charitable status in 2022. The changes would also coincide with similar planned actions in England. Presently, out of the 83 private schools in Wales, 17 receive charitable non-domestic rates relief. Drakeford believes this provides an unjust advantage.
Drakeford explained that the proposal aims to reallocate funds to local services, by arguing that independent schools in Wales with charitable status should receive the same treatment as non-charitable schools.
However, concerns have been raised that these tax changes, including Sir Keir Starmer’s planned VAT on private school fees, could lead to a significant drop in private school enrolment. A recent Saltus Wealth Index report found that nearly 23% of parents might withdraw their children from private education, potentially shifting 140,000 children into state schools across England and Wales. Critics argue this would overwhelm the public education system and result in higher costs for taxpayers.
Tom Giffard, the Welsh Conservative shadow education minister, voiced his criticism of the proposals, labeling them as short-sighted. He cautioned that forcing more children into an already overloaded state school system would result in larger class sizes and would further burden the teaching staff.
The consultation by the Welsh government on the removal of charitable status for private schools will last for 12 weeks, ending on December 16.
Drakeford plans new tax hit on private schools in Wales (bmmagazine.co.uk)
