Labour to use George Osborne tactic to enforce tax on private school fees

Experts have said that wealthy parents could choose to pay for tuition in advance to try to avoid incurring costs from VAT under a new government.

Ms Phillipson said: “We would make sure the legislation is drawn in such a way to ensure that avoidance can’t take place. There is precedent for that.

“Back in 2010, George Osborne, when he made VAT changes, did something very similar. So we’re clear there was precedent when the legislation was drawn in such a way that it is effective in raising the money we need to invest in our state schools.”

After he raised the standard rate of VAT to 20 per cent from 17.5 per cent in 2010, Mr Osborne introduced “anti-forestalling provisions” aimed at preventing people from applying the lower rate for goods and services to pre-payments. It would, in theory, mean that VAT would be backdated to payments from before Labour abolished the tax exemption, as long as they were made for schooling that takes place while the policy is in place.

Schools as service providers would be liable to pay the tax if they are offering advance-payment schemes and whether they choose to pass on the cost to parents would be a matter for the school, it is understood.

Labour plans to use the money raised by the policy to fund plans, including the recruitment of 6,500 more teachers and putting mental-health counsellors in every secondary school. Earlier, Ms Phillipson set out proposals aimed at addressing what she described as “terrifying” levels of persistent school absence.

Labour would keep using fines to tackle school absences if it wins the election but penalties “can never be the answer alone”, she said.

She described parents allowing children to skip lessons without good reason as a “mark of disrespect” to teachers but said addressing the problem would require wider measures that link different services.

The party would introduce a national register of children who are not in school and use artificial intelligence to spot absence trends.

A new number, similar to the NHS number, would also be introduced to hold children’s records across different services together, Ms Phillipson has said.

More than a fifth of pupils missed 10 per cent or more of school sessions in autumn and spring terms 2022/23, according to latest figures.

Ms Phillipson attacked the Tories’ pandemic-era record on education in her speech, and said schools should be the “last to close and the first to open” if a similar national crisis hit under Labour.

“When the Government first reopened schools for most of our children, the pubs had already been open for weeks,” she said.