From 1 January 2024 private schools in the UK will be subject to VAT and must add Value Added Tax to their tuition fees, after losing the former exemption.
Understanding the Change
Previously, private educational institutions enjoyed a VAT exemption allowing tuition to be rendered without the added tax burden. Recently, these schools have been compelled to apply a standard VAT rate of 20% to their fees. It is a component of a wider government move to boost revenues by £460m next year, to £1.7bn in 2029/30. The funding is to help fund state education, including bringing in 6,500 new teachers to England.
Private School and Parent Implications
All told, it is expected to increase tuition fees for private education with the introduction of VAT. The standard VAT rate is 20% but government estimates suggest an average fee increase of around 10% depending on your circumstances. This adjustment could be important for the choice of parents regarding private education and, perhaps, enrolment numbers. Several private schools, however, have already begun to report a fall in secondary school pupils because of higher fees.
Centralyze Accounting’s LTD Guidance
We know that educational institutions and parents could be confused through these changes. Our team of experts is here to provide clarity and assistance:
For Private Schools: In addition to being able to assist clients with VAT registration, tax filings and fee adjustments to ensure correct VAT rates to comply with the new regulations, we also offer comprehensive support services to help them do all of this.
For Parents: And we provide guidance on understanding the financial implications these changes have, so you can make informed decisions about your children’s education.
Contact Us
For personalised advice and support, please reach out to us at:
Email: connect@centralyzeaccounting.co.uk
Phone: 0203 813 9087
We strive to be there, to help you through this transition, to keep you reflectively up to date on the latest financial regulations that will protect you.
If you’re after more detailed info about the VAT changes affecting private school fees, you can check out the original BBC article.