Headmaster of 125-year-old boarding school reveals Labour tax raid has cost them £2million as it is forced to hike fees to £60,000-a-year
The headmaster of a 125-year-old boarding school has revealed that Labour 's tax raid has cost them £2million and forced them to hike their fees up to £60,000.
Labour's decision to levy a 20 per cent VAT on private school fees has dealt a heavy blow to the sector, which some institutions have been unable to deal with.
Keith Metcalfe, the headmaster of Malvern College, said the introduction of taxes has set the school back around £1million as a result of the increased expense of providing bursaries and more pupils leaving under crippling fee hikes.
The school was hit by a further setback in April by a rise in National Insurance and the loss of business rates relief which cost the school an additional £1million.
The controversial tax, pledged in Labour's manifesto, came into force in January this year.
'We are seeing schools close and hearing others that are cutting back, and it's sad to see.
'Education is one of Britain's greatest exports. There's a certain amount of soft power in high quality education that goes around the world,' Mr Metcalfe told The Telegraph.
Malvern College, one of Britain's most elite schools, said this week it had no choice but to sell its prep school building and move students to the same site as the senior school.
The sale will fund the renovation of old boarding houses in the senior campus for junior students to move into.
Parents were told on Wednesday about the move, which is due to take place by the end of the 2026-27 academic year.
The school was founded in 1865 and will increase its fees in September to £59,295-a- year for boarders and £40,245 for day pupils – a hike of 20 per cent compared with a year previous.
But the headmaster said this investment was a 'strategic' risk at a time when other prep schools are closing.
Mr Metcalfe said: 'You can see in our region prep schools have got smaller. There have been examples of some closing. This is therefore an opportunity for us, rather than cutting back costs to save money, we can invest in the school by bringing them over here and we all benefit from that.'
Since January, 25 schools unable to cope with the raid have announced closure.
The £43,000-a-year boarding school Queen Margaret's School For Girls in York has become the latest to announce its closure, saying they are 'unable to withstand mounting financial pressure' following the introduction of VAT on fees.
It precedes a devastating blow to families after they lost a High Court challenge to the taxes on fees.
The judicial review claim, heard earlier this year, aimed to have the tax declared 'incompatible' with human rights law.
However, in a decision handed down on Friday, judges rejected all claims, despite agreeing with some of the arguments.
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