Private schools in Wales could lose their charity status from April 2024 under new proposals from the Welsh Labor government.
The move would mean fee-paying schools would have to pay domestic rates, a change expected to raise an additional £1.3 million per year. This is in addition to the UK’s plans to impose VAT on private school fees, which will also impact schools in Wales.
Welsh Chancellor of the Exchequer Mark Drakeford argued that the proposed changes would bring Wales in line with Scotland, where private schools lost charity status in 2022, and would align with similar moves planned in England. Currently, 17 of Wales’ 83 private schools receive a charity fees exemption, which Drakeford says creates an unfair advantage.
“We believe that independent schools with charity status in Wales should be treated in the same way as schools that are not charities,” Drakeford said, justifying the proposal as a way to redirect money to local services.
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 enrollments. A recent report from the Saltus Wealth Index found that almost 23% of parents could withdraw their children from private education, potentially moving 140,000 children to state schools in England and Wales. Critics argue this would overwhelm the public education system and lead to higher costs for taxpayers.
Welsh shadow education minister Tom Giffard criticized the proposals as short-sighted. He warned that placing children in an already strained state school system would increase class sizes and put additional pressure on teaching staff.
The Welsh Government’s consultation on abolishing charity status for private schools will last 12 weeks until December 16.