Rachel Reeves' budget tax raids have been blamed for Carrdus School's closure (Image: Getty)
A private school in rural Oxfordshire has confirmed that it will shut in July 2025 after staying open proved “unviable” following Rachel Reeves’ decision to add 20% VAT to independent school fees.
The scrapping of charitable business rates relief, which provides an 80% discount to private schools that are listed charities, was also a factor in the “deeply regrettable” closure.
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Parents at Carrdus School in Banbury, which charges up to ￡5,350 per term, were told last month that pupils would have to find alternative education arrangements for the next academic year after the longevity of the institution became “unviable”.
The chair of governors at the Tudor Hall-owned primary school confirmed this week that attempts to secure external funding had failed and that it would close next summer.
Alison Darling blamed Ms Reeves’ introduction of VAT on fee-paying schools for the move, telling parents that it was only thanks to a speedily-secured short-term solution that Carrdus wouldn’t be forced to close mid-year.
READ MORE Labour and Tories have bigger threats than Musk supporting Reform [COMMENT]
Carrdus School has been described as a "gem" by the Good Schools Guide (Image: Getty)
“It is deeply regrettable that the government’s decisions to add VAT to independent school fees, remove the charitable business rates relief and increase employers’ national insurance contributions have forced the closure of a very special school that has provided a great education to generations of children,” she told the Oxford Mail.
“We have not been able to simply absorb these financial pressures, as the government had suggested we should.”
The school, which has over 100 mixed gender pupils, was described as a “gem” by the Good Schools Guide, with “kind teachers” and “exceptional learning support”.
Efforts to convince the government to backtrack on the end of VAT exemption for private schools have been unsuccessful, with the Finance Bill clearing its first parliamentary hurdle last month, despite concerns raised in the House of Commons by opposition MPs.
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The government’s planned increase to national insurance contributions paid by employers is expected to heap more pressure on fee-paying institutions - with the Education Secretary promising compensations for schools impacted by the 1.2% rise.
Labour estimates that charging the standard 20% VAT rate on private school fees from January 1, 2025, will raise over ￡1 billion a year.
The money is expected to go towards “helping to improve education and outcomes for young people” including 6,500 new teacher roles in key subjects.