Since 1 January 2025, VAT on private school fees in the UK is charged at the standard 20% rate. It applies to tuition, boarding, and vocational training at private schools in England, Scotland, Wales, and Northern Ireland, and it is added to termly invoices for any term starting on or after that date. A second change followed in April 2025, when private schools in England lost the 80% charitable relief on their business rates, a cost most schools are passing into fees.
What the 20% Applies To
Three categories of charge now attract VAT: tuition fees, boarding fees, and vocational training supplied by a private school for a charge.1HM Treasury. Government Response to the Technical Note on Applying VAT to Private School Fees and Removing the Business Rates Charitable Rate Relief How the school labels the charge does not change the answer. If the payment is for education, vocational training, or boarding at a private school, 20% VAT is due.
Before this change, private schools were treated as “eligible bodies” under Schedule 9 of the Value Added Tax Act 1994, which put their fees in the same exempt category as state schools and universities.2Legislation.gov.uk. Value Added Tax Act 1994 – Schedule 9 The amended rules carve private schools out of that exemption while leaving state schools and universities inside it.3HM Revenue and Customs. Removal of VAT Exemption for Private School Fees
Vocational training bought from providers that are not private schools, such as standalone training providers or further education colleges, is unaffected and stays exempt. It is the private-school status of the supplier that pulls the charge into VAT.4GOV.UK. Education and Vocational Training (VAT Notice 701/30)
What Stays Exempt
Not every line on a school invoice is caught. Goods and services “closely related to education” remain VAT-exempt. That covers school meals, stationery, textbooks, school trips, and student transport. Schools have to separate these from taxable fees on the bill, so parents should see the two treated differently on invoices.
Wraparound and holiday care split in a way that surprises some families. Before- and after-school childcare stays exempt because it counts as welfare rather than education. Holiday clubs and out-of-hours educational activities run by the school, on the other hand, attract 20% VAT. Individual music lessons billed by the school as an additional fee are also taxable.
A narrow point worth knowing: if a self-employed music teacher charges families directly, even for lessons on school premises, the school is not making the supply and VAT does not apply through the school.
Nursery Classes
Nursery classes are specifically excluded from the new charge. The legislation applies to education provided by a private school “other than the provision of education in a nursery class.”3HM Revenue and Customs. Removal of VAT Exemption for Private School Fees Families with a child in a nursery attached to a private school will not see 20% added to those fees. Once the child moves into Reception or Year 1, full VAT applies.
Fees Paid in Advance
Paying several years upfront to escape the new rate does not work. The legislation includes anti-forestalling provisions tied to 29 July 2024, the date the policy was formally announced. Any fees invoiced or paid on or after that date, for terms starting on or after 1 January 2025, carry 20% VAT.5HM Revenue & Customs. Private School Fees – VAT Measure
The tax point is the delivery of the education, not the payment. A family that paid a lump sum in August 2024 covering terms through 2027 owes VAT on every term from January 2025 onwards, and the school will invoice for the additional tax. Older composition-fee arrangements, where a capital sum was paid years ago in exchange for reduced future fees, may also be caught if the teaching is delivered after the cut-off, though treatment depends on the contract.
Payments made before 29 July 2024 for terms that started before 1 January 2025 are not affected. The line is straightforward: if the term begins in 2025 or later, VAT applies regardless of when the money moved.6The Education Hub. VAT on Private Schools – Everything You Need to Know
If Your Child Has an EHCP
Children placed in a private school by a local authority under a formal Education, Health and Care Plan are protected from the cost rise. The local authority funds the placement and can recover the VAT it pays using powers under Section 33 of the VAT Act 1994.7HM Revenue & Customs. VAT Government and Public Bodies – Local Authority Education Services The government has said the intention is that pupils with the most acute needs, where those needs cannot be met in a state school, are not adversely affected.5HM Revenue & Customs. Private School Fees – VAT Measure
The protection is narrow. It depends on the child having a formal EHCP and the placement being funded by the local authority or a health body. Parents who choose a private school for a child with special educational needs, but without local authority funding or a formal plan, pay the full 20%. Over 1.2 million pupils in England have identified special educational needs without an EHCP, so a large number of families fall outside this protection.8Explore Education Statistics. Special Educational Needs in England
The Business Rates Change
A separate change from April 2025 affects fees indirectly. Most private schools in England are registered charities and had been entitled to mandatory business rates relief under Section 43 of the Local Government Finance Act 1988, which reduces the bill for charitable occupiers to one-fifth of the standard amount.9Legislation.gov.uk. Local Government Finance Act 1988 – Section 43
Private schools are now excluded from that relief. HMRC guidance states eligibility requires the property to be used by “a charity, or the trustees of a charity (except private schools).”10GOV.UK. Business Rates Relief – Charitable Rate Relief A school that had been paying a fifth of its rates now pays the full amount. Schools with large estates face bills that can rise by hundreds of thousands of pounds a year, and much of that flows through to fees on top of the VAT.
Charitable status itself is not withdrawn. Gift Aid on donations, certain stamp duty reliefs, and other charitable tax advantages remain. The removal is specific to business rates.
What to Check on Your Invoice
Schools charging fees have to register for VAT with HMRC and issue VAT invoices.11GOV.UK. Check if You Must Register for VAT if You Receive Private School Fees On a current termly bill, VAT should appear as a separate line against tuition, boarding, and any billed vocational training or extra-curricular lessons, while meals, textbooks, trips, and transport should sit outside the VAT calculation. Nursery fees should not carry VAT. Families paying by direct debit may see the higher amount applied without a new contract being issued, so it is worth reading the first few invoices from 2025 line by line to confirm the tax has been applied only where it is due.