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VAT and independent schools

The Labour government has implemented value-added tax (VAT) on fees for private schools, which was a manifesto pledge. Steven Proud assesses the likely impact of this policy

© Greg Balfour Evans/Alamy Stock Photo

supply and demand, elasticity, impact of taxation

Generally speaking, most goods and services in the UK are subject to a standard rate of VAT of 20%, although there are several exemptions. For example, most food and children’s clothes are exempt from VAT, while home gas and electricity are taxed at 5%. Until 2024, fees for private education also attracted a zero rate of VAT.

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Previous

Interview: Making a real-world difference

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Fiscal policy: Why do we have lower minimum wage rates for young people?

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