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Private school

Connect with fellow parents here about private schooling. Parents seeking advice on boarding school can vist our dedicated forum.

Anyone know their school fees increase for Sept 2025 yet?

41 replies

Roomgigi · 19/03/2025 14:21

I'm expecting to hear next week - one school said they expect it to stay below the retail price index

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pickleparty · 08/04/2025 10:50

We had 4.9% in 2024, the full 20% VAT added in Jan 2025 and a further 2.2% in Sept 2025. They've finally bought in a sibling discount but only for 3+ children (and I only have 2).

Roomgigi · 09/04/2025 09:27

Second school has come in at 3% - just about bearable

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Scottishexplorer · 13/04/2025 08:35

10%, passed on 15% of the VAT

Minnowmeow · 13/04/2025 12:40

No increase next year but full VAT is being passed on (it was only passed on at 16% I think). (Prep school)

Transitioning to secondary now and still have not had the fee confirmation through, which I think is odd as they need to give a terms notice or a terms notice from families don’t apply.. They only passed on 10% of the VAT so expecting at least 10%, but more likely 15%.

Lucked · 13/04/2025 16:02

Full VAT passed on. No fee raise for Sept but did have 8% last year.

midlandsmummy123 · 28/05/2025 20:18

We still haven't heard from either school and its half term, one was an 8% fee increase in Sept plus 15% VAT in Jan, can't remember the annual fee increase for the other but VAT of 15% was also applied in Jan.

Not sure why they leave it until half term as surely this makes things tricky for anyone that wants to leave and has to give a terms notice.

San8 · 30/05/2025 20:43

Any school putting up fees by 20% and blaming it solely on VAT is being economical with the truth as certain aspects of their expenditure will be VAT exempt.

midlandsmummy123 · 30/05/2025 21:05

Its not just VAT though it's also the loss of charitable relief on business rates and the increase in NI.

User211211 · 30/05/2025 22:47

@San8when Labour won last year, our school did the sums and reckoned they’d be able to claim back a whole £131 per pupil and they’d pass it on, but like most small schools they don’t have vast reserves to absorb the VAT. Then business rates were charged and NI hiked and the £131 was wiped out. They’ve committed to not increasing fees in September however.

San8 · 30/05/2025 23:32

User211211 · 30/05/2025 22:47

@San8when Labour won last year, our school did the sums and reckoned they’d be able to claim back a whole £131 per pupil and they’d pass it on, but like most small schools they don’t have vast reserves to absorb the VAT. Then business rates were charged and NI hiked and the £131 was wiped out. They’ve committed to not increasing fees in September however.

That sucks I guess it’s the richer schools can claim back more vat if they spend it on building new facilities etc. I feel for everyone committed to a private education for their kids with the endless fee rises above inflation and now vat.

strawberrybubblegum · 31/05/2025 10:49

San8 · 30/05/2025 20:43

Any school putting up fees by 20% and blaming it solely on VAT is being economical with the truth as certain aspects of their expenditure will be VAT exempt.

I think you've misunderstood what's changed with VAT. I don't blame you: the government have deliberately used misleading language.

It's not that private schools must start paying VAT on the things they buy: they always had to do that (unlike state schools who got it reimbursed).

It's that they must now charge parents 20% VAT on fees and hand that directly to the government.

To explain the VAT offsetting (since people do get confused about it), eg:
1.Furniture Company WeBuildStuff buys some wood for £100 + VAT, ie costing WeBuildStuff £120 total. £100 goes to the woodsman. The woodsman must send £20 to the government

2.WeBuildStuff turns the wood into a table. They will sell it for £200+VAT (ie Joe bloggs will pay £240 for the table.

3.WeBuildStuff can offset the £20 VAT they paid on the wood (which the woodsman sent the government) against the £40 they got from Joe Bloggs as VAT. Ie they only send the government £20 VAT. They haven't actually gained anything: they had already given the other £20 to the woodsman to give to the government. The government ends up with £40 (which is 20% of the total cost of the table, paid by Joe Bloggs - the end consumer), the woodsman ends up with £100 and WeBuildStuff ends up with £100.

It's just a clever way of gathering the tax, so that the government get 20% of the final cost in total, without repeating another 20% at each point along the supply chain. Each company is responsible for collecting the VAT on 'the value they have added'. Paid for by the end consumer.

For private schools, they already paid VAT on anything they bought. But because they didn't charge VAT on fees, they weren't able to offset it against any VAT paid by parents. They were counted as the 'end consumer' of those things they bought.

Now that education itself is VATable they collect VAT on fees. The private schools will now effectively not pay VAT separately on the VATable goods they buy (as if they were an end consumer): instead it's rolled into the VAT the parents pay on everything: teaching as well as other VATable and non-VATable costs.

When you think about it that way, it's obvious why the VAT offsetting can't make that much difference. In education the biggest expense is teaching salaries which the school obviously don't pay VAT on (only NI and other employment taxes).

On average private schools costs are estimated to go 20% on VATable expenditure, 50% salaries, and 30% on other non-VATable costs.

Offsetting that 20% of their expenses which are VATable - ie they save 17% of the cost of those VATable goods - means they can reduces fees by 3.5%. ...But now if you add the 1.2% employers NI increase on the 50% they spend on salaries, you have to put fees up by 0.6%. So they can reduce fees by 3%...

So if parents have to pay 20% VAT on 97% fees, their total cost already goes up by 16.5%, even before NMW increases and the newly added business rates (which are harder to estimate).

And that's average - including rich schools with lots of capital spending. Smaller schools will spend a higher proportion of their income on salaries, so you can redo the calculation for them. (A school spending 5% of income on VATable expenses and 70% of income on staff have to spend all the offset VAT on the NI increase, so can't reduce fees at all.)

The government are deliberative misleading the public about this policy. They're using all sorts of divisive rhetoric like 'tax breaks' and 'choosing to pass on the tax' which are blatant misinformation.

Next you'll be telling me that you believe Labour that this will bring in extra money for state schools.. even when the parents who were saving the government £8k per year decide not to...

San8 · 31/05/2025 11:19

strawberrybubblegum · 31/05/2025 10:49

I think you've misunderstood what's changed with VAT. I don't blame you: the government have deliberately used misleading language.

It's not that private schools must start paying VAT on the things they buy: they always had to do that (unlike state schools who got it reimbursed).

It's that they must now charge parents 20% VAT on fees and hand that directly to the government.

To explain the VAT offsetting (since people do get confused about it), eg:
1.Furniture Company WeBuildStuff buys some wood for £100 + VAT, ie costing WeBuildStuff £120 total. £100 goes to the woodsman. The woodsman must send £20 to the government

2.WeBuildStuff turns the wood into a table. They will sell it for £200+VAT (ie Joe bloggs will pay £240 for the table.

3.WeBuildStuff can offset the £20 VAT they paid on the wood (which the woodsman sent the government) against the £40 they got from Joe Bloggs as VAT. Ie they only send the government £20 VAT. They haven't actually gained anything: they had already given the other £20 to the woodsman to give to the government. The government ends up with £40 (which is 20% of the total cost of the table, paid by Joe Bloggs - the end consumer), the woodsman ends up with £100 and WeBuildStuff ends up with £100.

It's just a clever way of gathering the tax, so that the government get 20% of the final cost in total, without repeating another 20% at each point along the supply chain. Each company is responsible for collecting the VAT on 'the value they have added'. Paid for by the end consumer.

For private schools, they already paid VAT on anything they bought. But because they didn't charge VAT on fees, they weren't able to offset it against any VAT paid by parents. They were counted as the 'end consumer' of those things they bought.

Now that education itself is VATable they collect VAT on fees. The private schools will now effectively not pay VAT separately on the VATable goods they buy (as if they were an end consumer): instead it's rolled into the VAT the parents pay on everything: teaching as well as other VATable and non-VATable costs.

When you think about it that way, it's obvious why the VAT offsetting can't make that much difference. In education the biggest expense is teaching salaries which the school obviously don't pay VAT on (only NI and other employment taxes).

On average private schools costs are estimated to go 20% on VATable expenditure, 50% salaries, and 30% on other non-VATable costs.

Offsetting that 20% of their expenses which are VATable - ie they save 17% of the cost of those VATable goods - means they can reduces fees by 3.5%. ...But now if you add the 1.2% employers NI increase on the 50% they spend on salaries, you have to put fees up by 0.6%. So they can reduce fees by 3%...

So if parents have to pay 20% VAT on 97% fees, their total cost already goes up by 16.5%, even before NMW increases and the newly added business rates (which are harder to estimate).

And that's average - including rich schools with lots of capital spending. Smaller schools will spend a higher proportion of their income on salaries, so you can redo the calculation for them. (A school spending 5% of income on VATable expenses and 70% of income on staff have to spend all the offset VAT on the NI increase, so can't reduce fees at all.)

The government are deliberative misleading the public about this policy. They're using all sorts of divisive rhetoric like 'tax breaks' and 'choosing to pass on the tax' which are blatant misinformation.

Next you'll be telling me that you believe Labour that this will bring in extra money for state schools.. even when the parents who were saving the government £8k per year decide not to...

Edited

Thanks for the explanation. No- I disagree with the policy as it happens.

TreadSoftlyOnMyDreams · 02/06/2025 22:15

10% on top of 5% in September and 15% in Jan which basically swallowed last years planned increase. There is uproar with active plans for state sixth form. Intake was down 20% in year 7 last September.

Roomgigi · 03/06/2025 11:16

midlandsmummy123 · 28/05/2025 20:18

We still haven't heard from either school and its half term, one was an 8% fee increase in Sept plus 15% VAT in Jan, can't remember the annual fee increase for the other but VAT of 15% was also applied in Jan.

Not sure why they leave it until half term as surely this makes things tricky for anyone that wants to leave and has to give a terms notice.

Check your contract - some will have a clause that if they don't give a terms notice of the increase you don't need to give a term's notice to leave

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Floatingthrough · 09/08/2025 11:33

Ours did 8% in Sept 24, 15% in Jan 25 and 5% for 25/26, which basically means that all VAT has been passed on now and the real term increase on fees is 4% plus 20% VAT.

mrssunshinexxx · 15/08/2025 23:48

We had 15% in Jan (vat)
4.5% this sep
6% last Sep

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