BREXIT MEANS WE RUN OUR OWN COUNTRY AGAIN
Summary:
In summer 2024 Labour announced it would remove the VAT exemption for all UK independent schools. This would not be possible without Brexit, as EU law states educational establishments must be exempt from VAT.
Explanation:
In the run up to the general election campaign of Summer 2024, the Labour Party announced it would remove the VAT exemption for all independent / “private” schools in the UK.
This policy would not be possible within the EU, as it is specifically details in EU law that educational establishments must be exempt from VAT.
The Greek government attempted to introduce the same policy in 2015, and was reminded by the EU Commission that such a policy is against EU law and accordingly had to withdraw its action. Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax – Art. 132 , “1. Member States shall exempt the following transactions: [..]
(i) the provision of children’s or young people’s education, school or university education, vocational training or retraining, including the supply of services and of goods closely related thereto, by bodies governed by public law having such as their aim or by other organisations recognised by the Member State concerned as having similar objects;”
The newly elected Labour Government subsequently announced VAT will apply from 1st January 2025.
Reference: https://www.legislation.gov.uk/eudr/2006/112/article/132
Reference: https://www.ekathimerini.com/news/201031/commission-says-private-school-vat-breaks-rules/
Reference: https://lordslibrary.parliament.uk/independent-schools-proposed-vat-changes/
Reference: https://taxpolicy.org.uk/2024/01/26/school_fee_vat_avoidance/
Reference: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32006L0112