Private schools will lose their special status from January 2025 and have to add VAT to their fees from that date, Labour have confirmed.
Whilst schools can also recover VAT for the first time and offset some of their own costs, it’s unclear how many schools will do this in practice so parents are bracing for a 20% increase, with Labour estimating the net cost for most schools will be 15%. It’s up to the school to decide if they pass any savings on.
VAT will also be due on boarding costs, hitting boarders even harder.
Average annual fees are £18,064, according to the Independent Schools Council (ISC), and £42,459 for boarding schools. That means an increase of £2710 and £6368 per annum respectively, if a 15% was passed on to parents through fees.
Clearly this will causes problems for some families, although nobody will want to take their children out of private education unless they have to. The ISC revealed that a third of all ISC pupils receive some help with their fees, totalling £1.4bn in fee support through bursaries and scholarships. This was up by 10.2% on the previous year. Many private schools are pro-actively contacting parents about how they can help.
We are able to advise on the best way to plan for school fees, so please raise this with us if you have any questions or concerns.