MoD: Royal Navy, Army and RAF families given more cash to help with private school fees after tax rises
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The Government will increase the funding allocated to the continuity of education allowance (CEA) – which supports these staff with boarding school fees for their children – ahead of imposing 20 per cent VAT on private schools. It comes amid warnings from staff they could quit the armed forces if they were not given help ahead of the VAT changes.
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Hide AdChancellor Rachel Reeves confirmed plans to apply VAT to private school fees from January in the Budget. The CEA – which can cover up to 90 per cent of boarding school fees – is designed to ensure that children of military staff or diplomats who are required to work away frequently to fulfil their duties do not have their education disrupted.
A Treasury document, released on Wednesday, said the Ministry of Defence (MoD) and the Foreign, Commonwealth and Development Office (FCDO) “will increase the funding allocated to the CEA to account for the impact of any private school fee increases on the proportion of fees covered by the CEA in line with how the allowance normally operates.” It added: “The Government greatly values the contribution of our diplomatic staff and serving military personnel.”
The MoD and FCDO will “set out further details shortly”, the document said. Earlier this week, European ambassadors warned that imposing VAT on international schools in the UK could lead to hundreds of pupils leaving. German ambassador Miguel Berger and French ambassador Helene Duchene told The Times they wanted international schools excluded from plans.
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Hide AdA Government consultation on plans to apply VAT to private schools highlighted concerns that military and diplomatic families who send their children to a boarding school to prevent them from having to move schools every time their parents are posted in a different country “would not be able to afford to keep their children in boarding schools” unless the CEA increased.
An Army Families Federation (AFF) spokesperson said: “It is helpful to military families to have some further details about how continuity of education allowance will be increased in response to the legislation applying VAT to private school fees.”
But they added: “Soldiers in receipt of CEA will still have to make a minimum 10% parental contribution, which will not be protected from fee increases arising from the application of VAT.” A statement from the RAF Families Federation said the announcement in the Budget was “an improvement on the initial uncertainty faced by families”.
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Hide AdThe Government predicts that 35,000 pupils will move into UK state schools “in the long-term steady state” following the VAT policy in January. A further 2,000 children will leave private schools, consisting of international pupils who do not move into the UK state system or domestic pupils who move into home-schooling, according to a Government policy paper.
A total of 37,000 pupils leaving or never entering the sector equates to around 6% of the current private school population. On average, the Government expects private school fees to increase by around 10% as a result of the introduction of VAT. The Office for Budget Responsibility (OBR) estimates the cost of pupils entering the state sector as a result of the policy will be around £300 million.
Julie Robinson, chief executive of the Independent Schools Council (ISC), said: “While we welcome the mitigations for military families and children with EHCPs (education health care plans), the Government’s rush to implement this policy and failure to acknowledge the diversity of independent education will have a devastating effect on schools and young people alike.
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Hide Ad“In particular, we are concerned about what VAT will mean for low-cost faith schools, for specialist arts and music provision, and for over 100,000 children receiving Send support in an ISC school who now face VAT on their fees.” Ms Robinson added: “Ultimately, it is children in both state and independent schools who will lose out as a result of the Government’s haste to enact these policies.”
An MoD spokesperson said: “We greatly value the contribution of our serving personnel and we provide the Continuity of Education Allowance (CEA) to ensure that the need for the mobility of service personnel does not interfere with the education of their children.
“In line with how the allowance normally operates, the MoD will continue to pay up to 90% of private school fees following the VAT changes on January 1 by uprating the current cap rates to take into account any increases in private school fees.”
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