With the recent announcement around VAT on UK private school tuition fees you may have concerns if you have any children enrolled in a private school.
The announcement on 29 July 2024 by the Chancellor of the Exchequer, Rachel Reeves, means that from 2025 private schools now fall within the VAT scheme and 20% VAT is to be charged from 1 January 2025. The changes also cover any boarding services provided by a private school, or a connected person.
The way this is going to be implemented is that any school fees invoiced or paid from 29 July 2024 that relates to school terms after 1 January 2025 will be subject to VAT. While any schools paid before 29 July 2024 will follow the current VAT treatment, meaning that nothing will change.
The main aim of these changes to generate additional revenue for HMRC, who in turn will use the funds to provide additional funding to state education.
So, in simple terms, any private schools that relate to terms on or after 1 January 2025 will be subject to VAT and any amounts paid before 29 July 2024 will not be changed.
If you’d like to talk to us about the VAT changes, or need any guidance, please get in contact with us.