VAT on British Boarding School Fees

What is VAT on Private UK Schools all about?

The new Labour government has applied 20% VAT to private schools in the UK. They were exempt as educational charities but this exemption has now been removed. The government claim that the additional money raised will help to pay for more teachers in state schools. VAT is a tax that is levied on a business so they add it to their price and after offsetting any VAT they have paid, pass the balance on to the government. As a customer the tax has already been included in the price you pay.

When will this happen?

January 1st 2025 is when the new VAT rules will be applied and schools will have to charge VAT from then on. Whilst there are some legal challenges being organised these will take time to reach court and so will not stop this happening.

How are British Boarding Schools reacting to this?

The majority of UK Boarding schools are trying to absorb some of the additional cost by reducing their fees before then applying the 20% VAT. This is having the effect that typically school fees are going to be, in the majority of schools, between 9% to 15% higher as a result. At the same time that this is happening they are also having to pay more in Employers’ National Insurance and having Business Rates Relief reduced so they are facing a higher cost base whilst at the same time reducing their net fees. There seems to be a general attitude that they want to maintain the quality of all that they provide and are conscious of the impact on the parental budgets so a great deal of effort has gone into trying to balance these opposing forces.

What will be the consequences for Boarding Schools in England, Scotland and Wales?

There will be some reduction in overall numbers of children privately educated as this will price some families out of the market. As a consequence, some schools may lose numbers and some children may have to look for different schooling options. Overall, most schools will survive and parents will dig a little deeper to pay for their children’s highly valued private education. Possibly schools will also slow down the rate at which they adopt new capital projects such as building a new theatre or a new boarding house.

How will this affect children from Germany?

Obviously, the cost of going to a boarding school in the United Kingdom has just gone up a bit but some of those schools that restrict numbers of pupils from the same country or insist on staying for 2 years or a full year may become a little more flexible. It will, however, depend on the school and the impact on pupil numbers may well not be fully understood until next September.

Is there anything I should do?

Sadly, no, the Labour government have a large majority in Parliament so this will happen without a doubt but as it is new for UK private schools it may just be worth checking that any fees being quoted are done so inclusive of VAT. Most schools will charge between 15.000 and 20.000 GBP per Term with an average around 17.800 GBP. Find out more about boarding school Costs.

When choosing a school parents can take into account the boarding fees and what is included. Some schools will include or charge extra for English as Foreign Language lessons, visa applications or airport transfers. More information can be found on the schools‘ websites and our page dedicated to fees. Outstanding students, athletes, musicians, actors or very good allrounders, have the opportunity to apply for scholarships, which can offer a fee discount to the family. We are very happy to support your children in the process.

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