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Yes. In the UK, most private schools’ tuition and boarding fees are now charged with VAT at the standard 20% rate for high-quality education and boarding linked to terms starting on or after 1 January 2025. Pre-payments made on or after 29 July 2024 for those later terms are also caught.
If you want help modelling your family’s costs, health and care plan, or a school’s VAT position cleanly, speak to MMBA Accountants today.
The simple story: private education used to sit inside a VAT exemption for improved education, and the rules were changed so that private school education, boarding, vocational training, and independent training provided for a charge are standard-rated.
The two dates that matter are the ones people mix up:
| What you are looking at | What date matters | What it means in plain English |
| Which school terms are taxed | Terms starting on/after 1 Jan 2025 | That is the “new world” start point. |
| Whether prepayments are caught | Payments on/after 29 Jul 2024 (for those later terms) | Paying early does not magically dodge VAT if it relates to the taxed terms. |
There is also a related change that many parents blend into “VAT” – private schools in England with charitable status lost business rates, and charitable organisations’ charitable relief from April 2025. Different tax breaks, different mechanisms, but it can still feed into fee pressure.
So what counts as a “private schools VAT ” here?
For VAT purposes, the policy targets fee-charging education for school children of compulsory school age, plus it also captures many 16–19 settings where the majority of fees paid (think private sixth form colleges) are in line with an independent schools council.
In practice, the lines most families recognise are the ones that move first:
Then you get the messy bit, or “extras”. Some after-hours lessons, clubs, or holiday provision can be taxable depending on whether they are separate supplies, welfare-type services, or school closures related to education.
The safest approach is to read the fee schedule like a VAT map: what is bundled, what is separate, what is optional.
The following are still exempt, though:
Some nursery school education can remain outside the change in specific scenarios (especially where provision is overwhelmingly for children under compulsory school age). Schools can still get this wrong when they bundle nursery fees and school fees together.
Even with the VAT change, not every item around a pupil becomes standard-rated. Guidance keeps the general concept that some goods/services closely related to education can remain exempt supplies(it depends on how they are supplied and to whom).
This matters a lot. Where a local authority funds a placement because a child’s needs cannot be met in the state sector, VAT policy design aimed to avoid an adverse significant impact, including VAT reclaim routes for those funded placements.
If parents choose private provision outside that funding route, VAT can still apply to what they pay.
This matters a lot. Where a local authority funds a placement because a child’s needs cannot be met in the state sector, VAT policy design aimed to avoid an adverse significant impact, including VAT reclaim routes for those funded placements.
If parents choose private provision outside that funding route, VAT can still apply to what they pay.
This is the question that makes everyone groan… because the honest answer is “it depends”, but not in a hand-wavy way.
Schools that become VAT-registered can often reclaim VAT on many costs (capital works, supplies, professional fees), so the net VAT liability burden is not necessarily 20% of fee income.
The government expected that, after recovery, schools might face VAT closer to ~15% of fee income on average (varies by school).
The ISC school reporting (first academic year with VAT in effect) suggested many schools reduced headline fees when VAT hit, leading to an effective pass-through of around ~14% on average in their snapshot.
So yes, some families saw a near-full hit. Others saw schools squeeze margins, cut spending, minimise fee increases, or lean harder on VAT recovery.
Nationally, the government’s modelling expected pupil moves into the state sector to be small relative to total state pupil numbers, even if it is still a big number in human terms.
A key practical point: moves tend to happen at natural transition points (Reception, Year 7, GCSE/A-level starts) rather than mid-year, because families will do almost anything to avoid ripping stability away during exam years.
That matches the way the education policy’s own impact discussion framed likely behaviour.
And there is also the political reality: this was a Labour government manifesto-level policy, designed to raise revenue for state education, and it has stayed in place.
Boarding is not a separate universe here. If the boarding services provided are closely linked to the education secretary and supply, they are generally pulled into the standard-rated treatment under the policy.
If a school offers mixed models (weekly, flexi, occasional boarding), the VAT treatment can hinge on whether it is a single bundled supply or separate supplies. That is why the invoice lines matter more than marketing copy.
For schools, the “oh no” moment is usually not the VAT itself. It is the admin and the systems.
If you are a parent, you do not need to master this. You just need to know this is why one school can hold rises down while another cannot.
If you only do one thing after reading this, do this: ask for the fee schedule and read it like a contract.
Here are five questions we would ask a bursar:
If you have felt whiplash around private school fees, you are not imagining it. The VAT change is real, it is already embedded, and the practical outcome sits somewhere between “20% more forever” and “nothing changes”. Most families land in the messy middleshaped by school structure, funding routes, and individual schools’ circumstances, and that is why the invoice detail matters.
Our honest advice: focus on (1) the dates, (2) what is bundled, (3) whether SEND funding changes the VAT position, and (4) whether your school is absorbing the cost or passing it through.
The charged VAT change applies UK-wide to the types of fee-charging private education described in the policy, including Northern Ireland, but local impacts vary by region and devolved education context.
Not reliably. The policy specifically catches many prepayments from 29 July 2024 when they relate to taxed terms in individual circumstances.
Yes, and the High Court dismissed challenges against adding VAT in draft legislation to private school higher fees for eligible bodies.
They can reduce what you pay, but they do not “remove VAT” by themselves. VAT follows the fee actually charged to the fee payers. So if the school discounts the finance bill (bursary/scholarship), UK VAT is typically calculated on the reduced amount. If a third party pays part of the fee, the VAT position depends on how the payment is structured, so ask the bursar for the exact invoice wording and who is shown as the customer.
Often, not all extras are treated the same. The policy keeps some “closely related” goods and services (other than boarding) within the exemption in many common special school scenarios, but bundling can change the outcome. Your safest move is to get a fee schedule that shows which items are standard-rated vs exempt and whether anything is being treated as a single “package” supply, including health and care plans.
