To ask the Minister of Education how the £0.042 million allocated for Private Schools VAT in the January Monitoring Round will be spent.

Due to the introduction of VAT on private school fees by the UK Government, schools in Northern Ireland that meet the legal definition of a private school must charge VAT on fees that fall within the scope of this policy. Regrettably, this definition captures a number of grant aided schools funded under the Common Funding Scheme (CFS).

As outlined in the Government’s technical note, education and boarding provided by state schools across the UK are not affected by this policy change, meaning they will continue to be exempt from VAT. This reflects the fact that state schools and academies continue to be “eligible bodies”.

I highlighted to HM Treasury that state boarding pupils (i.e. pupils funded under the CFS) at Royal School Armagh and Royal School Dungannon have inadvertently been captured by the Government’s amended legislation.

HM Treasury has acknowledged the difference in treatment between state boarding pupils in Northern Ireland compared to other UK Jurisdictions and agreed to provide a funding solution to address this.

The £0.042 million ringfenced funding will reimburse the VAT liability of the boarding fees associated with these pupils for the period 1 January to 31 March 2025, to provide an equivalent treatment to state boarding pupils across the UK that remain exempt from VAT.