Removing tax exemptions from private schools would raise £1.3–1.5bn per year, says IFS

A report by the Institute for Fiscal Studies, Tax, private school fees and state school spending, examines the Labour Party’s proposals to remove tax exemptions from private schools.

The Labour party has committed to remove tax exemptions from private schools, including exemptions from VAT and relief on business rates. The IFS estimates that this would raise tax revenues by about £1.6bn.

The evidence suggests higher fees are likely to have a weak effect on demand. With a small movement of pupils into the state sector, costing perhaps £100m to £300m a year, this would lead to a net gain to the public finances of £1.3–1.5bn, the report finds.