Gifted private school students from lower-income families will be spared VAT charges on fees, the Government has said.
Ministers have said the Government would provide financial support to pay the 20 per cent VAT on fees for some pupils on the music and dance scheme, a grant for specialist schools.
The scheme has been topped up for families earning less than £45,000 a year to account for the added VAT on fees they would otherwise have had to pay.
Campaigners have welcomed the move as a softening of the Government’s position but urged it go much further.
Rudolf Eliott Lockhart, chief executive of the Independent Schools Association, urged ministers to extend VAT relief to all families earning under £45,000.
But government sources have insisted the carve-out is not a reversal on the private school VAT policy.
Mr Eliott Lockhart, whose organisation represents a number of specialist arts and music schools, said: “Independent Schools supporting pupils through the Government’s music and dance scheme are trying to make sure that talent can be nurtured, regardless of financial background.
“I am glad that the Government recognises the range of pupils from different financial backgrounds that attend independent schools, and thus the need to exempt those on their music and dance scheme from VAT if their families earn under £45,000 a year.
“I hope the Government will consider extending this to all families with incomes under £45,000 who use independent schools.”
Lord Livermore, the Treasury minister, revealed the change while answering a question in parliament this week.
The Department for Education (DfE) has resisted describing the new arrangement an “exemption”.
A spokesman for the DfE said: “It is this Government’s mission to break down barriers to opportunity and ensure every child has the best life chances. This includes supporting more talented young people from disadvantaged backgrounds to forge careers in the creative industries.
“This is not an exemption to the Government’s private school tax break policy. The changes we have made to our music and dance scheme will help make sure families with lower incomes can continue to support their children to access specialist music and dance courses.”
In December, the Government said it would provide £9.4 million of support to pay the VAT on school fees for the children of Armed Forces personnel.
The Conservatives claimed the cost of the support, announced after weeks of pressure from campaign groups, could have paid for 250 soldiers.
The Government has been warned that if the full 20 per cent VAT raid is passed on to fees, the average yearly fee for secondary age boarding pupils will rise from £41,862 to £50,400.
