Jewish educational organisations have expressed disappointment that the government has rejected exemptions for small independent religious schools from plans to charge VAT on fees.
Chinuch UK has warned that the policy could lead some Charedi schools to close because parents were unable to afford the additional costs.
The Chancellor Rachel Reeves announced in Tuesday’s Budget that independent schools would become liable for VAT from January, while their current 80 per cent relief from business rates was due to be removed in April.
Motty Pinter, the director of communal affairs for the Strictly Orthodox charity Interlink Foundadtion and an activist with educational charity Chinuch UK, said, “We are deeply disappointed by the government’s decision to impose VAT on private school fees without a targeted exemption for low-fee schools serving low-income families.”
He added, “The additional burden of VAT on Charedi schools will create severe financial strain for low-income families already facing significant economic challenges. This could likely force many schools to close, leaving thousands of Jewish children without access to education aligned with their faith.”
The Jewish schools’ network, PaJeS, has previously warned that the policy could have disastrous consequences for the independent Jewish sector, in which most Charedi Jewish children are educated.
The organisation had proposed an exemption from VAT for schools which charge fees lower than the amount to educate a child in the state system, which is roughly around £8,000 a year.
But documents released by the Treasury say that this exemption would create too many “avoidance opportunities” and be difficult for Her Majesty’s Revenue and Customs to police.
PaJeS assistant director Raisel Friedman said it was “tricky to unpick” the Budget overall because the rise in national insurance contributions for employers would “likely negate any increases in funding for state schools”.
She added, “We are further disappointed that the 60 per cent of Jewish schools in the independent sector have not been given due consideration in the government’s response to the consultation over VAT and business rates relief.”
At a meeting with the Treasury this afternoon, she said, “We…had a full and frank discussion both thanking them for the increased funding for capital projects, SEND and Holocaust education and sharing our significant concerns”.
According to Treasury documents, smaller faith schools may be less affected as many rely on “voluntary donations in addition to, or instead of compulsory fees” and “donations are not subject to VAT”.
Independent schools will be entitled in future to claim VAT refunds on capital projects and educational supplies.
The government believes that the new policy will raise £1.5 billion for the state sector and reckons that around 35,000 children may switch from independent to state schools over the next few years.
Its position is that state education is “suitable for children of all faiths”.
However, Charedi groups argue that state schools would be unable to cater for the religious needs of their children — and it would be difficult to set up new Charedi secondary schools because of requirements to teach about LGBT issues.
Pinter said, “For families in the Charedi community, this policy threatens not only access to education that respects our cultural and religious values but also risks destabilising vital community institutions that provide essential services beyond the classroom.
“This policy will have a vastly disproportionate impact on Charedi families. Unlike the general private sector, attendance at independent schools is not a privilege for Charedi families, whose socioeconomic profile is vastly different it is a necessity.
“Many families struggle to afford even minimal fees, and extensive evidence submitted to the Treasury shows that most Charedi schools already operate at the edges of viability and cannot raise additional funds from parents or donations. The government has nonetheless chosen to press ahead.”
He warned, “If Charedi schools were to shut because the new policy would exasperate the precarious financial position of the Charedi schools, there isn’t sufficient space in state schools in areas like Hackney, Salford, and other regions with significant Charedi populations for all of the well over 20,000 Charedi school age pupils.”
