A Freedom of Information request obtained by The Telegraph has revealed that government ministers expected independent schools to absorb less than 1% of the VAT on fees policy from their profits.

A Treasury memo shows how the government calculated that its tax would result in parents facing a 10% fee increase. Ministers assumed an effective VAT rate of 15.4% after accounting for the tax schools can reclaim on their costs, and then showed how only 1% of this would be absorbed through schools’ profits or reserves, while a 10% proportion would be absorbed by the school making efficiencies.

The government calculated schools would then reduce their quality of service provided to pupils by 22% on top of the efficiency savings they had made so that parents would face an overall fee increase of 10.3%.

Shadow education minister Saqib Bhatti said: “We are already seeing school closures and thousands of children being forced to drop out, disrupting their education. And now we know even the government’s own figures show many schools can’t afford to pay.”