What is VAT on private school fees?
VAT on private school fees means private schools in the UK must charge 20% VAT on tuition and boarding fees. The policy took effect on 1 January 2025. Before then, education was exempt from VAT. The government said the money raised would help fund state schools and recruit more teachers.
Education fees had long been exempt from VAT. Labour promised in its 2024 manifesto to end the exemption, and it applied to fees for terms starting from 1 January 2025. Fees paid in advance after 29 July 2024 were also caught. From April 2025 private schools in England also lost their business rates relief. Nurseries for children under five remained exempt.
Schools can reclaim VAT on many of their own costs, so the full 20% is not always passed on. Many raised fees by around 10% to 20%. Pupils with education, health and care plans that require a private place are protected through council funding. In June 2025 the High Court rejected legal challenges claiming the policy breached human rights. Parents faced higher bills.
Supporters say it is fair to tax a luxury mainly used by wealthier families and use the money for state schools. Opponents argue it penalises families who stretch to pay, could push children into already full state schools and may close smaller schools. Some private schools have shut since the change, though the causes are debated. Final evidence on pupil numbers is still emerging.
Who it affects: Parents of privately educated children
The left generally supports the policy as fair, arguing private education is a privilege that should not get a tax break.
The right generally opposes it as a tax on education and aspiration that punishes families who make sacrifices to pay fees.
Britain is split. Now you decide.
In WeDecide you can keep or scrap VAT on private school fees in your Budget and see the effect on revenue and voters.
Play WeDecide freeCommon questions
When did VAT on private school fees start?
It applied from 1 January 2025.
What rate of VAT is charged on school fees?
The standard rate of 20%.
Do children with special needs pay VAT on school fees?
Where a council funds a private place under an EHC plan, the cost is covered.