How to avoid a VAT knockout

Independent schools will need courage and stamina to survive Labour's VAT on fees policy, writes Andrew Murfin

VAT on fees will be like a boxing match

It鈥檚 been a bruising month for the government. Since Rachel Reeves delivered her contentious budget, criticism has come from all sides 鈥 farmers outraged over inheritance tax changes, employers expressing dismay at added burdens, and even a petition to rerun the general election gaining traction. The Government, it seems, is firmly on the ropes.

What struck me, though, was that the Chancellor鈥檚 budget took place on exactly the 50th anniversary of the iconic 鈥溾 boxing match – an interesting parallel. Indeed, it has the potential to hit the independent school sector like a wrecking ball – or a trademark roundhouse left from George Foreman.

Just as in 1974, a new showdown looms on the horizon, this time in the world of education. In one corner, we have the government, with the Chancellor鈥檚 budget proposing a VAT on independent school fees 鈥 a financial uppercut that could reshape the educational landscape.

In the other, independent schools stand as modern-day Muhammad Alis, preparing to absorb the blows and strategising our response. Much like Ali and Foreman, these two forces are on a collision course, set to test resilience, strategy, and endurance in a clash over access, funding, and the future of independent education. This unlikely parallel of a high-stakes showdown, offers an opportunity to explore the tenacity required to weather the punches and remain standing.

Independent schools stand as modern-day Muhammad Alis, preparing to absorb the blows.

As Muhammad Ali prepared for the bout in Zaire (as the DRC was then known), he knew the battle wasn鈥檛 just about strength but strategy and resilience. Schools facing the looming impact of VAT on fees find themselves in a similar position, confronting a powerful force that threatens their core values and accessibility. Facing a towering opponent, Ali adapted his approach, training not just to avoid a knockout blow but to outlast, to wear down his adversary through grit and resolve.

A unified community will help schools face this challenge head-on. Rallying our communities in the face of mounting pressure to create support from a strong “corner” 鈥 governors, parents, staff, and alumni 鈥 can make the difference. A collective focus on long-term sustainability is needed as we meet these changes head-on to avoid a VAT knockout.

George Foreman鈥檚 confidence before the bout, as a younger fighter with seemingly unmatched power, was absolute 鈥 he was widely considered unbeatable, poised to dominate Ali and secure a swift victory. Labour, too, approaches the VAT on school fees policy with similar inevitability, banking on the promise of financial gain. Yet, just as Ali鈥檚 unorthodox “rope-a-dope” strategy wore down Foreman, this policy could encounter its own unexpected hurdles.

A collective focus on long-term sustainability is needed.

Should hard-working families find the added tax too heavy a blow, leading to declining pupil numbers, the anticipated revenue could fall short. Additional financial pressures 鈥 such as the loss of business rate relief or increased NI contributions 鈥 could force some schools to throw in the towel. A disaster for the sector, the school, the people that work there and, importantly, the young people educated in these establishments.

Displaced pupils may then need spots in state schools, which in some areas lack the capacity to absorb them, adding new pressures to the state system. The Treasury, too, might face demands from schools reclaiming VAT on historical capital investments. Labour may have hoped this policy would float in like a butterfly, yet it may end up stinging like a bee. As with The Rumble in the Jungle, outcomes in the ring 鈥 or the budget 鈥 aren鈥檛 guaranteed until the final bell.

Here are some parallels to draw upon with the rumble over VAT on school fees:

  • Roll with the punches: Endure the financial impact and pressure, whilst sticking to our core values and school visions.
  • Adapt:  Develop new strategies (鈥渞ope-a-dope鈥) to remain sustainable and deliver compelling outcomes.
  • Stamina: As Ali showed, it is a marathon, not a sprint (or 15 rounds), not a sprint. Staying focused and see it through.
  • Courage: Embrace the challenge with bravery to deliver the necessary changes to mitigate the potential strain on working families.

Much like the Rumble, this VAT challenge is a test of resilience, strategy, and unity. Here鈥檚 to schools holding their ground in the tough rounds ahead.