Impact from VAT on private school fees

[HoneyB2025]

Do you know anyone who has moved their DS or DD out of independent school to state due to the new VAT on private school fees?

Family of 3 dc - did state primary

Eldest now Y12 - family had always planned for him to stay at his private school until about 18 months ago. Decided this was no longer feasible if VAT came in- he's now in state 6th form.

Middle child unaffected as yet.

Younger child - Y6- will not be going private

Why do you regret the decision.

My daughter is in our local private school 6th form for Sen needs reasons - it's the cheapest private school fees in the area but their sixth form have lost two kids who have moved to state. This generation of kids have had so much disruption to their education with covid - the humane thing to do would have to have left at least the kids in exam years such as GCSEs and six form the chance to finish their education in their existing schools.

Sorry this is a daft comment -ALL parents are reluctant to take kids out of a settled school environment - it's not a private school parent thing. If parents are pulling kids out of a school it's usually for a very good reason and not being able to afford fee increases is a very good reason.

Unfortunately VAT doesn't work like that - it is either applied to a service or it isn't. The only way it could be 'supported' is a selective grant from the government for children in those particular years to cover the VAT and I suspect that would be open to discrimination claims.

Of course vat doesn't work like that - but the government were considering exceptions like with services personnel kids so they could have made exceptions for kids in exam years too.

There's no VAT exception, I believe - for personnel who have fees fully or partly paid by the MoD, the allowance can increase to reflect the increased fee.

I assume this is a fairly 'well worn' process in that the allowance can increase for other reasons such as promotion of the service person, or in line with inflation.

The exceptions are for (above CEA + the drama one) : kids with EHCPS which name the school and state boarding schools (which cost as much as indy day schools in many cases)
So yes they actually can easily write in any exceptions they want. FYI the increase to CEA doesn't fully cover the VAT increase so military families will have to partially cover the VAT themselves.

@twistyizzy I am talking about an actual exception to the VAT for specific children, as mentioned by the PP. As in, the VAT isn’t charged at all.

State boarding has not been included in the services eligible for VAT, so no child of any age/SEN/parental background is charged VAT.

For EHCPS, is it not added at all? Or is it added and covered by the LA along with the previous school fee?

Im not taking my DD out as coming to the end of prep and the plan is to send her private until university…
However the local independent ones are now at £30K a year. they were £22k just a year ago. I can afford it but is it still worth it? I’m not sure….
I also don’t like that less children will go and it will be the preserve of the wealthy.
I’ll also just spend less money on local businesses.

The VAT plus cost of living has been the final straw for us... youngest DC started in state senior and will stay in it , we left other two in private for another year (and natural break end of year 11 /13 )- I know many others who will do the same. Sixth forms are going to be heaving!! My DC are only at very low key private schools, not the eton types and only because their state schools were not good for their SEN. I'm pretty sure most private schools are struggling and this will be the end of a lot of them very soon.

Definitely seen movement because of VAT.

Also, families moving out of the country because of it.

Other impacts:
Drs moving to private practice from the NHS, better pay to cover fee increases.
Parents cutting services and goods:
gardeners
cleaners
ironing services
extra-curricular activities
Donations to charities
Donations for bursaries
Spending in local shops
Holidays
Building projects shelved, moving house now not a consideration.
Business expansion plans shelved because of less flexibility in budget, plus other business expenses increases such as NI.
etc, etc.

Most parents I know are not just absorbing it if they are staying in private - they are adjusting their budgets, which will impact the wider community.

Yes, there are some parents that it will hardly impact, but what I'm seeing is the above.