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Introduction of VAT on English Boarding School Fees - What You Need to Know Now

Greetings from Richmond!

How time flies! The official exit of the United Kingdom from the European Union on January 31, 2020, was already more than four years ago. Since then, a lot has changed in Great Britain, and political decisions continue to stir things up.

You may have already heard or read about the latest decision: the brand-new Labour government plans to introduce a 20% Value Added Tax (VAT) on private school fees starting in January 2025. This was announced on July 29, during the summer holidays here.

Whether this plan by the Labour government can indeed be implemented as early as January 2025 remains uncertain. It still needs approval from the British Parliament and the Ministry of Finance by the end of October. At the moment, the latter is showing considerable hesitation.

Nevertheless, the VAT introduction is very likely to happen. If not in January 2025, then probably in September 2025.

Here you can find out exactly what this means for an existing or potential boarding school stay on the island.

Seen at Winchester College

Value Added Tax (VAT) on Education in Great Britain: What Has Been the Case So Far

VAT in the UK works similarly to the German Mehrwertsteuer, applied to the sale of goods and services, and paid by the end consumer. Businesses collect the tax and remit it to the state. In the UK, the standard VAT rate is 20%.

In England, educational services have been VAT-exempt up to now. This is because many private schools and boarding schools have charitable status, which exempts them from VAT.

That’s how it has been until now.

Seen at Framlingham College: photography still-life

VAT on School Fees: What the Labour Government is Planning

The new Labour government under Sir Keir Starmer now plans to impose a 20% VAT on private school fees, starting as early as January 2025.

The tax revenue from this initiative is expected to exceed £1.5 billion and will be directly invested in the public school system. Primarily, the funds are intended to help recruit over 6,000 new teachers. The Labour Party views this as a necessary step to make the British education system fairer.

This plan will be presented and discussed in the British Parliament in October, with a concrete outcome expected on October 30 when the "Budget Statement" is released. It is currently assumed that Sir Keir Starmer will succeed in implementing the VAT introduction.

The general plan to introduce VAT has been known to local schools for over a year. However, the plan to implement it by January 2025 came as a big surprise.

Seen at Bradfield College: idyllic landscapes

VAT and British Boarding Schools: Current Plans

The planned VAT introduction on school fees will inevitably increase the cost of education at British private schools. A silver lining, however small, is that most schools are not planning to pass the full 20% increase on to families.

Fortunately, many of our partner schools have already been working for months to reduce operational costs without compromising the quality of their offerings. At present, it is expected that most of our boarding schools will need to raise their fees by between 10% and 15% in January 2025.

Seen at Westonbirt School: the dining hall

VAT Summary: How We Can Help

For some families, Labour’s VAT plans come as distressing news. Rising school fees can be a real challenge, especially with the additional burden of VAT. That’s why we are doing everything we can to find schools for your child that will either fully or partially absorb the VAT costs.

We offer transparent advice and keep up to date with developments regarding VAT at each school. This way, we can provide you with precise information on which schools plan to cover the additional costs fully or in part. Our goal is to ensure that no family is overly burdened by the new costs, so children can continue to attend boarding schools in England, Scotland, and Ireland and enjoy excellent education.

Questions? Then please give us a call or email us on +44 (0) 20 3953 4063 or email us on info@buloweducation.com.

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von Bülow Education
Holbrooke House
34 - 38 Hill Rise
Richmond
TW10 6UA

Tel: +44 (0) 203 9534063
Email: info@buloweducation.com

—Introduction of VAT on English Boarding School Fees - What You Need to Know Now

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Introduction of VAT on English Boarding School Fees - What You Need to Know Now