Michael Gove calls for end to VAT-free exemptions for private schools

Michael Gove, the former Education Secretary, has called on the Government to review the VAT and tax rules surrounding the charitable status of private schools, to bring them more in line with other businesses and publicly funded schools.

In a column written for The Times, entitled “Put VAT on school fees and soak the rich”, Mr Gove said the current system for educating the children of “plutocrats and oligarchs” should not be a charitable activity.

He believes removing the tax advantages of private schools would boost standards in the state sector and raise vital extra funds for the Treasury.

“Private school fees are VAT-exempt. That tax advantage allows the wealthiest in this country, indeed the very wealthiest in the globe, to buy a prestige service that secures their children a permanent positional edge in society at an effective 20 per cent discount,” Mr Gove wrote.

“Are the children of the rich intrinsically more talented and worthy, more gifted and more deserving of celebration than the rest? Of course not. But our state-subsidised private schools continue to give them every possible advantage.”

The former education secretary’s comments come at a time when independent schools are already under pressure from Government to do more to help less wealthy pupils.

Ministers are currently considering proposals that would place a greater expectation on private schools to open free schools or set up fully funded scholarships.

Meanwhile, the Prime Minister, Theresa May, has already indicated that the charitable status of private schools may already be under threat unless they set up or sponsor Government-run sister schools.

In a statement, a spokesperson for the Independent Schools Council said: “Charitable status is worth an estimated  £150 million to our schools, but we already give back much more in partnership work and bursaries – every year our schools give over £350 million in free places and reduced fees to children from low income homes.”

“Clearly if these tax benefits were removed, it would substantially impact our ability to offer extensive partnership work, which already helps 160,000 children in state schools.”