VAT on private education ‘could force closure of strictly Orthodox schools’, fear leaders

The government’s tax policy on independent schools, which comes into effect next month, could force the closure of many strictly Orthodox schools, leading to thousands of children having to be home-schooled, Jewish organisations have warned.

From January, independent schools will be liable to 20 per cent VAT on fees and from April, they face losing the 80 per cent relief on business rates as well as having to meet the cost of an increase in employer national insurance.

Chinuch UK, the umbrella organisation for Charedi education, and the Jewish schools’ network PaJeS, fear dire consequences if the government does not agree to make exceptions.

The case of a strictly Orthodox pupil will feature in a legal challenge to the government’s policy that is being prepared by the Independent Schools Council, the JC has learned.

Prime Minister Sir Keir Starmer was told of concerns about the impact of the policy when he met representatives from the Board of Deputies and other Jewish groups last Friday.

Rabbi David Meyer, chief executive of PaJeS, said the policies posed “a significant threat to the UK’s approximately 80 independent Jewish schools, with the Charedi community facing the most severe consequences”.

These schools, he explained, “often with an intake from a lower socioeconomic bracket, cannot absorb the cumulative financial pressures, especially within the same academic year”.

He added: “We are already seeing impending school closures, which will create fundamental disruption to Jewish educational infrastructure. With more than 20,000 children in Jewish independent schools, it is likely we will see a significant proportion being left without a school to attend. Many will be left with no alternative but to be educated at home.”

In a statement released by Chinuch UK, the mother of the child at the centre of the legal case, said tax hikes were “ a direct threat to families like mine”.

“These measures jeopardise the very foundation of our lives: my livelihood, my children’s education, rooted in our faith, and the stability we have worked so hard to maintain. Losing access to schools that align with our religious beliefs leaves us feeling powerless.”

She said she was “begging for these measures to be scrapped… Without intervention, we will lose everything we have built for our children’s future.”

The government hopes to raise £1.5 billion from its tax on independent schools to put into the state school sector.

It has argued that if some families can no longer afford to pay for their child’s independent school, they can switch to a state school. While there are a few Charedi state schools, most children from the strictly Orthodox community attend private institutions.

If schools in areas such as Hackney and Salford closed, state schools would be unable to cope with the large influx of children, even in the unlikely event they could meet the children’s religious needs.

Motty Pinter, of Chinuch UK, pointed out that the Treasury had taken steps to exempt military families and children with special needs who had Educational and Health Care Plans and ensured that private schools would remain accessible and affordable for them.

But it had “completely ignored the needs of strictly Orthodox Jewish children”, he said. “Charedi children face similar necessities, relying on independent schools to provide an education that mainstream state schools simply cannot replicate. Despite this clear parallel, their needs have been unjustifiably overlooked.”

Compared to average independent school fees in England of nearly £22,000 a year, Charedi schools charge just £2,200 to £4,000 on average. However, many parents do not pay anywhere near full fees. Children are not turned away if the families cannot afford to pay and schools are heavily reliant on donations.

Zvi Sobel, chair of governors of Bnos Beis Yaakov, an independent primary in Kingsbury, said: “We now face the very real threat of closure.

“We have always operated on the edge of financial viability, charging minimal fees. Our maximum annual school fees are £4,350, but with 107 pupils, only 16 families pay the full fees. Twenty-five families pay no fees at all, and the remaining families contribute as much as they can afford. We never turn anyone away because they cannot pay the full fees.

“To bridge the gap, we rely on an annual charity-matching campaign. However, the cost-of-living crisis has significantly reduced donations, and last year’s fundraiser fell short. Even with these contributions, we either just about break even or run a deficit, depending on the year.”

There was “absolutely no scope to raise more money from parents”, he said, and if donors too could afford to contribute more, then “we wouldn’t be running at a deficit”.

The new rules would leave Bnos Beis Yaakov facing “impossible decisions – whether to pay staff or meet these new tax obligations”, he said. “We cannot do both… Without intervention, the future of numerous Jewish schools, including ours, is in serious jeopardy.”

PaJeS and Chinuch have lobbied government to exempt independent schools charging fees less than £7,690 a year – the cost of educating a child in a state school – from the tax measures. They say this would only involve 270 schools nationally.

But the Treasury has previously argued that this would not be feasible.

A spokesperson said this week: “We want to ensure all children have the best chance in life to succeed. Ending tax breaks on private schools will help to raise the revenue needed to break down the barriers of opportunity for children and young people across the country.”

The Treasury did not believe the policy would have “a significant impact on the number of pupils attending private schools overall”, they said.