France and Germany have expressed criticism towards Sir Keir Starmer’s proposal to impose value-added tax (VAT) on private school fees, warning that this measure could displace numerous students from international schools and harm diplomatic relations with the UK. French and German ambassadors to London, Hélène Duchêne and Miguel Berger, conveyed to the Financial Times that international schools in the UK, which receive partial funding from foreign governments, are not typical independent schools and should be exempt from this tax.
The prime minister plans to eliminate the VAT exemption for private school fees starting in January, introducing a 20 percent surcharge. The government projects that this policy will generate £1.5 billion to invest in state education, including the hiring of 6,500 teachers.
Duchêne acknowledged that while the UK has the right to establish its own policies, applying VAT to international schools contradicts the initiative set by the British government to improve post-Brexit relationships with European countries. This view signals a potential misalignment with the goal to foster enhanced ties post-Brexit.
London-based diplomats highlighted the potential impact on the French school system in the UK, estimating that 25-30 percent of the 6,300 students enrolled might be forced to leave due to the new charge, which other schools are fully passing on to parents. They also pointed out that 20-25 percent of the 900 students at The German School in London could face financial difficulties as a result.
Furthermore, both Duchêne and Berger articulated concerns that this tax scheme might deter European companies from sending employees to UK assignments, as these employees often wish for their children to continue their state curriculum education abroad. Eleven French schools in the UK, including the Lycée Français Charles de Gaulle in west London, are affected. These schools, receiving significant public funding from Paris, adhere to the French national curriculum and prepare pupils for French exams.
Duchêne stated there was no request for an exemption from the rule, emphasizing that their schools are distinct from those targeted by the VAT measure as they are tailored to prepare students for French exams. She added that VAT could pose an issue for companies relying on these schools for their staff relocated to the UK for brief periods since alternative options do not align with the French curriculum.
Echoing similar sentiments, Berger stressed the importance of such schools to maintain cultural and business connections between countries, asserting they differ significantly from British private schools. He called for the British government to acknowledge the schools’ significance beyond political and cultural relations, underscoring their role in supporting the business community and bilateral ties.
Diplomatic sources noted that nearly 20 European schools in the UK would become subject to the new levy, with most unable to accommodate it due to financial pressures exacerbated by Brexit. The Treasury maintained that the objective is to provide all children with the best opportunities to succeed, with the removal of tax exemptions on private schools helping to fund educational priorities for the following year.