Insights
Private school fees are now subject to VAT. Here is what the change means for parents budgeting for fees and for schools managing registration, recovery and pricing.
From January 2025, education services and vocational training supplied by private schools in the UK are subject to VAT at the standard rate, together with closely related boarding services. The change affects household budgets, school pricing decisions and school accounting systems at the same time.
Previously, education supplied by an eligible body was exempt from VAT. Private school fees now fall outside that exemption, which means schools must register for VAT where they exceed the registration threshold, charge VAT on fees, and account for it to HMRC in the normal way.
| Area | Before the change | After the change |
|---|---|---|
| Tuition fees | Exempt from VAT | Standard-rated |
| Boarding fees | Exempt as closely related | Standard-rated |
| Input VAT recovery | Largely blocked | Recoverable on taxable activities |
| Fee invoices | No VAT shown | VAT shown separately |
Tuition fees
Boarding fees
Input VAT recovery
Fee invoices
Timing matters
The tax point rules and anti-forestalling provisions mean the date a fee is invoiced or paid can determine whether VAT applies. Review payment plans carefully.
Yes. Because fees are now taxable, schools can generally recover input VAT attributable to those taxable supplies, subject to partial exemption and the capital goods scheme.
Specific provisions apply where a placement is funded by a local authority. Schools and parents should confirm the treatment for each funded place.
Yes. VAT is a UK-wide tax, so schools in Scotland are affected in the same way as the rest of the UK.
We advise schools on registration, partial exemption and recovery, and help families understand the real cost of fees after VAT.
Disclaimer
This post provides general information about VAT on private school fees in Scotland and the UK. Specific requirements may vary based on your individual or organisational circumstances. Always consult with a qualified accountant or advisor—like Stratton Financial Limited—before taking any action or making financial decisions related to VAT.
Need help understanding how this applies to your business? Speak with our team for tailored advice.
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