The UK’s centre-left Labour government announced on Wednesday that it will end the tax exemption for private schools, a move expected to generate over £1.5 billion ($1.9 billion) annually.
Starting January 1, private schools will face a 20% value-added tax (VAT) on tuition fees.
The funds will be directed toward recruiting thousands of new teachers and improving standards in state schools, addressing years of growing educational inequalities.
“It’s time things are done differently”, finance Minister Rachel Reeves said in a statement on Sunday.
The funding will “go towards our state schools where 94 percent of this country’s children are educated”, she said.
The policy was promised by Labour in its election campaign and officially laid out in its inaugural budget in October.
It hopes the move will bring in £1.5 billion for the 2025/2026 school year and rise to #1.7 billion a year by 2029/2030, which will be used to fund 6,500 new teachers in the public sector.