UK Private School Fees Jump 22% in Wake of New VAT Policy
Private school fees in the UK have seen a sharp 22.6% increase year-on-year, driven largely by the introduction of 20% VAT on tuition, according to new figures from the Independent Schools Council (ISC).
As of January 2025, the average termly fee for day schools stood at £7,382, up from £6,021 the previous year. The policy, introduced mid-academic year on January 1, was part of the UK government’s effort to channel funds into the state education sector.
However, many in the education community are warning of unintended consequences, particularly for middle-income families and students with special needs.
Treasury Responds, Schools Push Back
A Treasury spokesperson acknowledged the fee hike but argued the rise isn’t solely caused by VAT, saying the data “misrepresents reality.” According to the government, the VAT change was projected to raise fees by about 10%, with some schools expected to absorb part of the cost.
But schools say the reality is harsher. ISC CEO Julie Robinson highlighted a “triple whammy” impacting the sector:
- The end of charitable business rate relief
- National Insurance adjustments
- The newly applied 20% VAT on fees
“It’s already prompting parents to pull their children out, and the true impact may take years to fully materialize,” Robinson stated.
Real Families Feel the Strain
One parent, Kath, said she was forced to withdraw her 12-year-old son with SEND from his private school when notified of the fee hike. She described the move as traumatic, saying she only had 15 days to secure a state school place.
“We live modestly—one second-hand car, few holidays. This hike pushed us out,” Kath explained, noting that she is now applying for an Education, Health and Care Plan (EHCP) to support her son in the public system.
Schools Warn of Impact on Vulnerable Families
David Morton, headmaster at King’s School, Gloucester, said the tax change is “misjudged,” explaining that low- to middle-income families and bursary students are being hit the hardest, not the ultra-wealthy.
The school charges between £3,725 and £9,050 per term and says the VAT burden is falling disproportionately on families already struggling to afford private education.
Government: State Sector Can Absorb the Shift
The UK government estimates around 35,000 students will transfer from private to state schools due to the change—a small portion compared to the projected 700,000 drop in overall student numbers by 2030.
Research from the Institute for Fiscal Studies (IFS) supports this, noting the state sector should be able to accommodate the increase in pupils.
Legal Challenge and Future Outlook
A judicial review of the VAT policy is underway, filed by three different groups, including SEND parents and low-income faith schools. A court decision is expected soon.
Meanwhile, Labour says the policy will help recruit 6,500 new specialist teachers and raise £1.8 billion annually by 2029/30. Critics warn that school affordability and access to specialized education may continue to suffer in the short term.
Summary:
The VAT policy on UK private school fees has triggered a steep rise in costs, disproportionately affecting middle-class families and students with special needs. While the government anticipates a minor shift to the public sector, families and school leaders warn that the long-term effects on education access and quality remain to be seen.
