Private Schools Across UK Close Due to VAT on Fees

by Abigail Roch

Some private schools in the UK are having to close down due to the government’s plan to add 20% value-added tax (VAT) to education and boarding fees.

Labour decided to end tax breaks on private schools from 1 January this year, to invest in better education in state schools starting next academic year.

The Catholic boarding school for boys and girls Loughborough Amherst, in Leicestershire, has announced it will shut down permanently after the end of this academic year on 4 July.

The foundation’s chair of governors, Roger Harrison, wrote in a letter to the parents: “Despite significant financial support and sustained efforts to grow pupil numbers, the school has been unable to sustain a surplus throughout its 10 years.

“We have, therefore, and with regret, reached the point where it will be no longer financially viable to continue to run the school beyond the end of this academic year.”

The Jewish primary school in Hertfordshire – Immanuel College Prep School – has also planned to close in July, due to “unprecedented financial pressure”.

Daniel Levy, chairman of governors at Immanuel College, said: “The past five years, starting with COVID, through the period of high inflation and now with the addition of VAT to school fees, has created unprecedented financial pressures across our sector.”

In the UK, 7% of students are educated in the 2,500 private schools – 570,000 of which live in England. Up until 2025, private schools were exempt from VAT for being organisations providing education.

Although tax breaks are UK-wide, the expenditure of the additional money will be decided by each nation. Labour estimates that the measure will raise £460m during the 2024/2025 academic year, increasing to £1.8bn by 2029/2030.

The government has pledged that the money will be used to hire 6,500 new teachers in England, as schools have been facing difficulties with quality teaching for years. 

Amid growing concern for future students moving to state schools – as it is estimated that some 37,000 pupils will be affected – the government believes that class sizes will not increase, as overall student numbers are planned to drop by 700,000 by 2030.

LYIS thought piece: International schools in the UK are directly affected by the new policy, and should be alert to and prepared for the repercussions of added VAT to education and boarding fees. 

Abigail Roch is the Journalist at Leading Your International School.

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