As of 1 January 2025, major changes came into force regarding VAT on private school fees. If you’re involved in the education sector or a parent affected by these changes, here’s what you need to know – and what actions you should be taking now.
VAT Now Applies to Private School Fees
Since the beginning of this year, education and boarding services provided by private schools are subject to the standard 20% VAT rate. This means tuition, boarding, and any other associated services are now taxable, which has resulted in increased costs for many families.
Advance Payments – Still Subject to VAT
Even if school fees were paid in advance, VAT still applies if the payment was made on or after 29 July 2024, and the services started on or after 1 January 2025. Early invoicing does not exempt those payments from VAT.
What’s Still Exempt?
-
Nurseries with children below compulsory school age remain exempt.
-
Non-maintained special schools funded by public authorities through block grants are usually outside the scope of VAT.
VAT Registration & Reclaiming
Private schools must be VAT registered if their taxable turnover exceeds £90,000 in any 12-month period. Registered schools can reclaim VAT on related costs, but partial exemption rules may apply if they also provide services that remain VAT-exempt.
If you’re unsure how these changes impact your school or finances, or if you’d like support with VAT registration and reclaiming, our team at Lucas Prestige Accountants is here to help.
Call us today or visit our website for expert, tailored advice.
👉 www.lucasprestigeaccountants.co.uk
📧 info@lucasprestigeaccountants.com