New statistics demonstrate that due to Labour’s increase in VAT on private schools, many are being compelled to reduce their workforce, scholarships, and range of courses as student enrollment continues to decline.

Many private schools are making difficult decisions to maintain financial stability after Labour imposed a VAT on fees. This has resulted in job cuts, reduced bursaries, and a narrower range of subjects being offered, according to a recent survey.

Some of the country’s most prestigious private schools are being hit hard with cost cutting measures seeing pay, pensions and jobs being axed.

Due to the new policy, private schools are now required to pay a 20% VAT tax on their fees. Consequently, subjects like Latin, which have lower demand, are being eliminated from the curriculum as a cost-saving measure.

In her Budget speech last October, Labour Chancellor Rachel Reeves confirmed the implementation of this policy despite strong opposition. Critics have denounced it as a ‘tax on education.’

Now a straw poll has revealed the measure’s impact on private schools since it was introduced.

The majority of 84 schools polled said they had applied at least 11 per cent of VAT onto fees since January.

Nineteen revealed they had reduced the range of subjects taught, while 24 had changed or withdrawn contributions into the Teacher Pension Scheme.

Meanwhile, more than a third said they were making staff redundant, while 50 were not renewing contracts. 

Some private schools were partnering less with state schools or reducing the number of trips offered to pupils as a result of the VAT charge.

Elsewhere, two-thirds (53) were reducing bursaries and 52 were putting new facilities or building projects on hold, the survey conducted by The Times showed. 

St Joseph’s School, an independent school located in Reading, said the number of Year 7 pupils accepting places were 20 per cent down on last year, adding: ‘As a school that has worked to maintain its fees below the rest of the market, to try and keep independent education within reach of as many families as possible, it seems that this policy is hitting our parents the hardest.’ 

Prep school Westbourne House, in West Sussex, predicted it would have 40 fewer pupils as a result of the VAT changes.

Many schools are also bracing themselves for the coming months, with headteachers predicting parents will pay up this year but may well be considering alternatives for their children next year. 

Critics of the VAT charge, which will hit parents £2,000 each per pupil on average, have branded it a ‘tax on aspiration’ and warned it will simply force more parents to send their children to the already overburdened state sector.

Official data suggests an exodus is already underway, with 124 local councils in England, Scotland and Wales receiving 3,011 applications from private school pupils to move to a state school between June 1 and September 9.

The figures, obtained in Freedom of Information requests, are likely to understate the scale of private school exits given a further 83 councils either did not respond or said they did not have the data.

Independent Schools Council (ISC) chief executive Julie Robinson has accused Labour of ‘underestimating’ how many privately educated pupils would leave as a result of the policy, with the Treasury previously predicting the figure would be 3,000 for the entire 2024-25 academic year.

Prince William’s old school Eton put fees up by 20 per cent from £17,583 to £21,100 per term, while at Harrow and Marlborough fees are roughly £60,000.

Sir Keir Starmer’s government justifies the VAT tax by arguing the money raised from it can be reinvested in the state school system.

However, if parents with pupils at private schools decide they cannot afford the fees, they are likely to move their children into state schools which will increase already overly large class sizes.

In January, Godolphin Prep, in Salisbury, Wiltshire, announced it would be shutting at the end of the school year.

The private school, which opened in 1993 and charges £12,196 per year, told parents that surviving had become ‘particularly precarious’ due to the introduction of VAT on school fees.

A letter to parents seen by the Salisbury Journal said: ‘The future for stand-alone prep schools is particularly precarious at present; not only due to the introduction of VAT on fees but also in terms of ensuring we remain at the cutting edge.’

Pupills, made up of girls aged between three and 11, will transfer to the nearby Chafyn Grove and will be automatically handed places at the senior school at Godolphin.

The school blamed declining pupil numbers too, telling parents: ‘In the current climate, ensuring each pupil is able to enjoy the full range of learning and socialising opportunities becomes much harder to deliver.’

In December, Immanuel College Prep School, a private Jewish school in Hertfordshire, said it was closing in light of ‘unprecedented financial pressures’.

Dominic Norrish, the chief executive of the Independent Association of Prep Schools, said: ‘The true impact will take several years to fully surface and will see more of the smallest and affordable schools close.’

A government spokesman said: ‘Through our Plan for Change we are determined to break down the barriers to opportunity children face, driving high and rising standards across education. Our teachers are integral to that mission.

‘Ending tax breaks for private schools will raise £1.8bn a year by 2029-30 to help deliver 6,500 new teachers and raise school standards, supporting the 94pc of children in state schools to achieve and thrive.’