The controversial policy could have a devastating impact on the armed forces community (Image: Getty)
Rachel Reeves is considering amending adding VAT to private school fees following backlash by the armed forces community.
According to the Telegraph, the government are considering changes after serving members of the armed forces threaten to leave should the changes be made to school fees.
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Ministers are understood to be considering a range of options ahead of the budget on October 30, with the addition of VAT to private school fees expected to be announced.
Currently, members of the armed forces receive a discount on the fees for private education, a subsidy driven in large part to ease the burden of service on families and shelter children from the upheaval of changing schools when parents receive assignment orders.
Last month, The Army Families Federation wrote to the Treasury to warn that as many as 70% of those serving who currently educate their children privately would consider leaving should the policy be introduced.
Currently, private schools enjoy charitable status making them exempt from VAT (Image: Getty)
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The introduction would come at a time when “the offer” the package that incentivises and rewards service is under significant threat, with changes proposed to housing allowance that could see those in service accommodation moved into smaller premises.
The reduction of incentives exasperates an ongoing recruitment problem which has seen Army recruitment partner Capita consistently fail to meet the quota of new troops into basic training.
Such is the level of the Army’s recruitment gap that the MOD has announce significant changes to its selection criteria to allow people with conditions that would previously prevent service to be allowed to join.
It is understood that one of the potential mitigations being discussed is a VAT exemption for military families who receive the Continuity of Education Allowance (CEA) – a form of taxpayer-funded support to help with private education.
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The armed forces are currently facing a morale and recruitment crisis (Image: Getty)
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The CEA covers up to 90% of boarding school fees for service children, capped at ￡9,080 a term for senior school pupils and ￡7,489 for younger pupils.
One service person said: “The government should bear in mind that service families are impacted adversely with frequently moving job assignments, especially spouses careers presenting zero job stability or progression.
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“We accept this is inevitable with our line of work, so the independent boarding offer adds to the wider options for school for our children.”
“It is certainly not a luxury when I’m paying 25k+ a year top up towards school fees and clubs for 3 children over the age of 10.
“The Government should take a cue that making CEA options unaffordable with VAT for service personnel will not only make Soldier recruiting and retention an issue for the services as it currently is, but most Officers with children will equally consider a career change into civilian jobs, at least to stabilise their education.”