Call 01992 444466

VAT on independent school fees – what we know so far

The new Labour Government is proposing to apply VAT to independent school fees. Both independent schools and independent school parents are advised to start anticipating the change and plan for additional costs. 

What does removing the VAT exemption from school fees mean in practice?

Currently, independent schools, and those schools registered as a charity, qualify as an ‘eligible body’ and are exempt from charging VAT for their services. This exemption also covers activities related to the provision of education, such as school trips, meals, and boarding.  The proposed change will remove the definition of a ‘eligible body’ from independent schools so that all independent school students being educated in the UK would be charged fees at the 20% VAT rate.

Why is VAT being applied to school fees?

By levying VAT on school fees, it is predicted that around £1.6 billion additional tax revenue will be raised. The current plan is to spend this additional amount on recruiting 6,500 new teachers in key subjects to the state school system.

When will VAT be applied to school fees?

Applying VAT to independent school fees was mentioned in the recent King’s Speech at the State Opening of Parliament. It stated that the VAT exemption will be included in the post-election budget in the Autumn, with the measure passing into law in the next finance bill. We do not know whether the it will come into effect in April 2025, at the start of the next tax year, or in September 2025 at the start of the new academic year.   

Will VAT charges apply to international students?

According to UK law, VAT is chargable if the education supplier is based in the UK. This means that VAT could also be charged on fees for international students looking to study in the UK.

Will VAT be charged on fees for children with an EHCP?

The Labour Government has previously confirmed that the changes will not affect children and young people with an Educational, Health, and Care Plan (EHCP).   

How can schools mitigate the impact of increased costs for parents?

There are still many unknowns about the plan, however, it appears likely that VAT exemption will happen as this was a key part of the Labour manifesto and it was mentioned in the King’s Speech.

It may be possible for schools to mitigate some of the 20% VAT charge by claiming expenses, such as on purchasing text books, food, and other assets. This is still to be confirmed and we will not know more until the details of the plan are shared. Schools shoud be cautious about giving parents too much advice on potential mitigations. 

It is important that both parents and schools monitor the situation and take expert advice as more detail is released by the government.  

HB Accountants is here to help you

HB Accountants supports your both your business and personal finances, and will always share information that will help with growing your business, improving your personal life or mitigating changes to the tax system.


  • Get ahead for the new year – 8 accountancy tasks to tackle now
    While it is incredibly tempting to wind down in the days leading up to Christmas and take it easy between Christmas and the New Year celebrations, it really is the perfect time to ensure that your accounts are in tip top shape.
  • Take the Stress Out of Your Self-Assessment Tax Return
    As the self-assessment tax return deadline looms, freelancers, sole traders, and ‘solopreneurs’ across the UK are bracing themselves for what can feel like one of the most daunting tasks of the year. If you’re already feeling the pressure, you’re certainly not alone.
  • HMRC Advisory Fuel Rates (AFRs) from 1st December 2024
    Advisory fuel rates (AFRs) are recommended reimbursement figures for drivers reclaiming business mileage, usually for those in company vehicles. The advisory fuel rate is updated by HMRC based on fuel prices every quarter, and publish revised figures if required in late February, May, August and November each year
  • Accounting for Christmas
    As we leap towards the start of the festive season, with Christmas only a few weeks away (sorry!), we are sure that marketing and people teams are full speed ahead with planning Christmas parties and finding ways to to thank everyone for their hard work and loyalty over the past year. This means it is … Continue reading
  • Solving a Finance Director’s Worst Nightmares: Strategies to mitigate or prevent them from occurring
    Finance professionals are not only responsible for financial transactions and reporting, they are directly involved in the operation of their organisations; providing strategic direction and high-level decision making. However, with this expanded responsibility and new technology, there comes new challenges.

Nimbus Green Hosting Logo

© 2024 HB Accountants | Privacy Policy | Disclaimer | Terms of use | Website by Origin 1

Logo of the Institute of Chartered Accountants in England and Wales

HB Accountants is the trading name of HBAS Limited, a company registered in England with registration number 5085258. The registered office of HBAS Limited is Plumpton House, Plumpton Road, Hoddesdon, Hertfordshire EN11 0LB, England. Registered for VAT number 866062806.