The New VAT Rules for Private Schools: Implications and How Ashdown VAT Consultancy Can Help

Now that you have registered for VAT, private schools across the UK must navigate the realities of this significant change: the introduction of VAT on school fees. This development is expected to have far-reaching implications for schools, parents, and the private education sector as a whole Here, we explore the challenges posed by this new regulation and how Ashdown VAT Consultancy can help schools and parents manage these changes effectively.

What Are the New VAT Rules?

Under the new legislation, private schools are required to include VAT on their fees for tuition and boarding provided from January 2025. While this change may address fairness concerns, it creates substantial challenges for stakeholders in the private education sector.

Implications for Schools

For private schools, the addition of VAT introduces:

Fee Increases: To accommodate the VAT requirement, schools may need to raise their fees. This can impact enrolment rates as some families may no longer afford private education.
Pricing Challenges: Schools must strike a delicate balance between meeting operational costs and maintaining affordability.

Implications for Parents

For parents, the new tax rules bring significant financial challenges. They may face:

Higher Education Costs: With potentially an additional 20% VAT, on the fees many families will see significant increases in their annual school expenses. Parents may need to reconsider budgets or seek alternative funding options to continue their children’s education.
Potential Disruption: In some cases, families might need to explore alternative schooling options if private education becomes unaffordable.

How Ashdown VAT Consultancy Can Help

At Ashdown VAT Consultancy, we specialize in guiding schools and parents through the financial complexities of VAT. Here’s how we can support you:

Cost Mitigation Strategies: Our team identifies ways to reduce the financial impact of VAT, such as ensuring claims are made for VAT incurred where possible, including on VAT incurred previously on capital projects, helping schools operate efficiently without overburdening families.
Tailored Guidance: Every school is different and some service provided by a school may not be liable to VAT. We offer customized advice and solutions tailored to your school’s unique needs.

Take Action Today

The new tax landscape for private schools may seem daunting, but with the right support, schools and families can adapt successfully. Ashdown VAT Consultancy is here to help every step of the way.

Schedule an initial consultation with our VAT experts to discuss how VAT applies to the services that you provided and what VAT can be recovered, both historically and going forward.

The addition of VAT to private school fees is a challenge, but it’s also an opportunity for schools to foster innovation in cost management, streamline operational efficiency, and explore new strategies to maintain accessibility for families. Ashdown VAT Consultancy is committed to making this transition as smooth as possible for all stakeholder and has worked with a number of schools in the past months to help them transition to this new VAT regime.