Armed forces recruitment crisis could worsen over VAT on private school fees, insiders say
A recruitment and retention crisis in the armed forces will grow unless the government exempts military families from paying VAT on private school fees, insiders have warned.
Sky News understands that more and more families are raising concerns internally about the “damaging” policy after the chancellor failed to offer sufficient protections in her budget.
They say a promise to increase an allowance funded by the Ministry of Defence (MoD) that helps to cover the cost of school fees does not go far enough, and that highly experienced personnel – officers and other ranks – will quit if Rachel Reeves does not perform a U-turn.
Such a loss in skills would weaken UK defences at a time of rising threats, the insiders say.
A soldier with a child at boarding school, who asked to remain anonymous, said: “I will have to leave military service, as I will not inflict another school move on my child.”
He said: “On one side, the chancellor wore a poppy during her budget announcement, and then proceeded to deal a damaging blow to members of His Majesty’s Armed Forces by not including a simple exemption.”
Defence Secretary John Healey joins serving military personnel to hand out poppies. Pic: PA
An army spouse, who asked for her identity to be protected because her husband is serving, said: “This is people’s children. This is people’s money in their pocket.”
She told Sky News: “If there is a nice job offer outside the military… that is going to look way, way more attractive than it did a few months ago. The army is in a recruitment and retention crisis, so why would you do something like this?”
Offering a sense of the scale of the potential impact, the Army Families Federation, an independent charity, said nearly 70% of families that shared evidence with it about the policy said without protection from the full cost of the VAT they would consider quitting the service.
The mobile nature of military life – with postings around the UK and overseas – often requires service personnel to move every few years, with any children they have forced to relocate with them, transiting in and out of different schools.
To protect against this disruption some parents decide to send their kids to private school – often to board.
More than 2,000 of these personnel – the majority of them in the army – claim money from the MoD to help cover the cost of private school fees.
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The Continuity of Education Allowance (CEA) funds up to 90% of tuition fees but families must pay a minimum of 10%.
Many of those who take this option will have agonised over the affordability of the portion they will still pay, which can amount to tens of thousands of pounds per year.
They will now have to pay more to cover the VAT on this portion of the bill – or else pull their children out of school, a nightmare option, especially for those serving abroad.
In addition, some other military families that do not qualify for the education allowance – which is only allocated under a very strict criteria – still opt to put their children into boarding school to ensure the continuity of their education at a single location.
They will have no protection from any of the VAT burden.
James Cartlidge. Pic: PA
James Cartlidge, the shadow defence secretary, said he has received a lot of messages from impacted families and is urging the government to give them an exemption.
“The emails I’ve had are saying: I’ve got to choose between my child and serving my country,” said Mr Cartlidge, who previously served as a Conservative defence minister.
“The government really needs to respond to this quickly.”
An MoD spokesperson said: “We greatly value the contribution of our serving personnel and we provide the Continuity of Education Allowance to ensure that the need for the mobility of service personnel does not interfere with the education of their children.
“In line with how the allowance normally operates, the MoD will continue to pay up to 90% of private school fees following the VAT changes on 1 January by uprating the current cap rates to take into account any increases in private school fees.”
European Union regulators are reportedly mulling a $1 billion fine against Elon Musk’s X, taking into account revenue from his other ventures, including Tesla and SpaceX, according to The New York Times.
EU regulators allege that X has violated the Digital Services Act and will use a section of the act to calculate a fine based on revenue that includes other companies Musk controls, according to an April 3 report by the newspaper, which cited four people with knowledge of the plan.
Under the Digital Services Act, which came into law in October 2022 to police social media companies and “prevent illegal and harmful activities online,” companies can be fined up to 6% of global revenue for violations.
A spokesman for the European Commission, the bloc’s executive branch, declined to comment on this case to The New York Times but did say it would “continue to enforce our laws fairly and without discrimination toward all companies operating in the EU.”
In a statement, X’s Global Government Affairs team said that if the reports about the EU’s plans are accurate, it “represents an unprecedented act of political censorship and an attack on free speech.”
“X has gone above and beyond to comply with the EU’s Digital Services Act, and we will use every option at our disposal to defend our business, keep our users safe, and protect freedom of speech in Europe,” X’s global government affairs team said.
Source: Global Government Affairs
Along with the fine, the EU regulators could reportedly demand product changes at X, with the full scope of any penalties to be announced in the coming months.
Still, a settlement could be reached if the social media platform agrees to changes that satisfy regulators, according to the Times.
One of the officials who spoke to the Times also said that X is facing a second investigation alleging the platform’s approach to policing user-generated content has made it a hub of illegal hate speech and disinformation, which could result in more penalties.
X EU investigation ongoing since 2023
The EU investigation began in 2023. A preliminary ruling in July 2024 found X had violated the Digital Services Act by refusing to provide data to outside researchers, provide adequate transparency about advertisers, or verify the authenticity of users who have a verified account.
Related: Musk says he found ‘magic money computers’ printing money ‘out of thin air’
X responded to the ruling with hundreds of points of dispute, and Musk said at the time he was offered a deal, alleging that EU regulators told him if he secretly suppressed certain content, X would escape fines.
Thierry Breton, the former EU commissioner for internal market, said in a July 12 X post in 2024 that there was no secret deal and that X’s team had asked for the “Commission to explain the process for settlement and to clarify our concerns,” and its response was in line with “established regulatory procedures.”
Musk replied he was looking “forward to a very public battle in court so that the people of Europe can know the truth.”
Source: Thierry Breton
Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
US crypto exchange Coinbase has filed with the US Commodity Futures Trading Commission (CFTC) to launch futures contracts for Ripple’s XRP token.
“We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures — bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets,” stated Coinbase Institutional on April 3.
The firm added that it anticipates the contract going live on April 21.
According to the certification filing, the XRP (XRP) futures contract will be a monthly cash-settled and margined contract trading under the symbol XRL.
The contract tracks XRP’s price and is settled in US dollars. Each contract represents 10,000 XRP, currently worth about $20,000 at $2 per token.
Contracts can be traded for the current month and two months ahead, and trading will be paused as a safety measure if spot XRP prices move more than 10% in an hour.
“The exchange has spoken with FCMs (Futures Commission Merchants) and market participants who support the decision to launch a XRP contract,” the firm stated.
Coinbase is not the first to launch XRP futures in the United States. In March, Chicago-based crypto exchange Bitnomial announced the launch of the “first-ever CFTC-regulated XRP futures in the US.”
XRP futures trading is available on many of the world’s leading centralized crypto exchanges, such as Binance, OKX, Bybit and BitMEX.
Funding rates remain negative
In late March, Cointelegraph reported that XRP derivatives’ funding rates had flipped negative as investor sentiment turned bearish.
Related: XRP funding rate flips negative — Will smart traders flip long or short?
Funding rates are periodic payments between traders in perpetual futures markets that help keep the futures price aligned with the spot price. Positive funding rates mean that long traders (buyers) pay short traders, while negative funding rates mean short traders (sellers) pay long traders.
When funding rates go negative, it means short traders are willing to pay a premium to maintain their positions, indicating strong conviction from bearish derivatives traders.
XRP funding rates remained negative on major derivatives exchanges as of April 4, according to CoinGlass.
XRP OI-weighted funding rates. Source: CoinGlass
Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
Former Binance CEO Changpeng “CZ” Zhao will begin advising the Kyrgyz Republic on blockchain and crypto-related regulation and tech after signing a memorandum of understanding with the country’s foreign investment agency.
“I officially and unofficially advise a few governments on their crypto regulatory frameworks and blockchain solutions for gov efficiency, expanding blockchain to more than trading,” the crypto entrepreneur said in an April 3 X post, adding that he finds this work “extremely meaningful.”
His comments came in response to an earlier X post from Kyrgyzstan President Sadyr Zhaparov announcing that Kyrgyzstan’s National Investment Agency (NIA) had signed a memorandum with CZ to provide technical expertise and consulting services for the Central Asian country.
The NIA is responsible for promoting foreign investments and assisting international companies in identifying business opportunities within the country.
Source: Changpeng Zhao
“This cooperation marks an important step towards strengthening technological infrastructure, implementing innovative solutions, and preparing highly qualified specialists in blockchain technologies, virtual asset management, and cybersecurity,” Zhaparov said.
The Kyrgyzstan president added: “such initiatives are crucial for the sustainable growth of the economy and the security of virtual assets, ultimately generating new opportunities for businesses and society as a whole.”
Kyrgyzstan, which officially changed its name from the Republic of Kyrgyzstan to the Kyrgyz Republic in 1993, is a mountainous, land-locked country.
It is considered well-suited for crypto mining operations due to its abundant renewable energy resources, much of which is underutilized.
Over 30% of Kyrgyzstan’s total energy supply comes from hydroelectric power plants, but only 10% of the country’s potential hydropower has been developed, according to a report by the International Energy Agency.
CZ has met with several other state officials in Asia
Malaysia also recently tapped CZ for guidance on crypto-related matters, with Prime Minister Anwar Ibrahim meeting him personally in January.
CZ has also met with officials in the UAE and Bitcoin-stacking country Bhutan — however, it isn’t clear what those meetings entailed.
Related: Is Bitcoin’s future in circular economies or national reserves?
CZ’s latest pursuits come a little over six months after he was released from a four-month prison sentence in the US for violating several anti-money laundering laws.
Since being released, CZ has made investments in blockchain tech, artificial intelligence and biotechnology companies.
CZ also recently donated 1,000 BNB (BNB) — worth almost $600,000 — to support earthquake relief efforts in Thailand and Myanmar after the natural disaster in late April.
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