UK schools

Private School VAT in the UK: What the Rules Mean for Your Fees in 2026

Published: September 6, 2026
Updated: September 6, 2026
By Miguel

Since 1 January 2025, private school fees in the UK have carried 20% VAT. It was the first time in the history of the tax that education supplied by an independent school was treated as a standard-rated commercial service rather than an exempt one, and nearly two years on the effect on family budgets is clear enough to measure school by school.

This guide explains what actually changed, what is and is not taxed, what it has done to real fees at real schools, and what options are left for families feeling the squeeze.

The short version

VAT at 20% applies to tuition and boarding at private schools across the UK, for terms starting on or after 1 January 2025.
Schools did not all pass on the full 20%. On average they absorbed around a quarter of it, cutting headline fees before adding the tax.
Nursery and pre-school classes, wraparound childcare, holiday clubs and welfare services generally remain exempt.
If a local authority funds a place named in an EHC plan, the LA recovers the VAT and the family is not out of pocket. Self-funding SEN families get no relief.
Paying years of fees upfront to dodge the tax does not work. Anti-forestalling rules have applied since 29 July 2024.
Business rates relief was withdrawn separately, in April 2025, which is part of why fees have kept rising since.

How we got here

The policy came from Labour’s 2024 general election manifesto, which promised to end both the VAT exemption and charitable business rates relief for private schools and put the money into state education.

Date	What happened
July 2024	Government confirms 20% VAT from 1 January 2025; technical note and consultation published (17,502 responses)
29 July 2024	Anti-forestalling rules take effect on prepayments
30 October 2024	Autumn Budget confirms implementation
1 January 2025	VAT applies to fees for terms starting on or after this date
20 March 2025	Finance Act 2025 receives Royal Assent (sections 47 to 49)
1 April 2025	Charitable business rates relief withdrawn in England and Wales
September 2026	Average fees rise a further 4.5% for the new academic year

Technically, the change works by inserting a new set of exceptions into Group 6 of Schedule 9 to the VAT Act 1994, the part of the law that had exempted education. Three things are carved out of the exemption: education by a private school, vocational training by a private school, and board and lodging closely related to either.

One quirk worth knowing: the Finance Act 2025 only received Royal Assent in March 2025, months after schools started charging the tax. The commencement provision treats the relevant sections as having come into force on 30 October 2024, with effect for terms beginning on or after 1 January 2025.

What “20% VAT” actually did to fees

This is where most coverage goes wrong. VAT was added to fees, but schools became able to reclaim VAT on their own costs at the same time. Building work, IT, minibuses, professional fees and utilities all became partly recoverable, which cut the net cost of the change. Many schools also reduced their headline fee in January 2025 to soften the blow.

The Independent Schools Council found that its member schools passed on the equivalent of about 14 percentage points of the 20%, not the full amount. Around 69% of ISC day schools cut their pre-VAT fees that January, by an average of 5%. Roughly one in ten cut by between 10% and 20%.

The Office for National Statistics recorded the effect directly: private school fees in its inflation basket rose 12.7% in a single month in January 2025. In January 2026 the same series recorded no month-on-month change at all, because the one-off shock had already washed through.

Average fees, before and after

From the 2025 census onwards the ISC publishes average fees excluding VAT, so comparing headline figures across years without adjusting is misleading.

Average termly fee	Jan 2024 census	Jan 2025 census (ex VAT)	Jan 2026 census (ex VAT)	Jan 2026 with 20% VAT added
Day school	£6,021	£6,152	£6,226	approx £7,471
Full boarding	£14,153	£14,365	£14,980	approx £17,976
Day place at a boarding school	£7,975	not published	£8,611	approx £10,333

On an annualised basis, an average day place now costs somewhere close to £22,400 a year including VAT, against roughly £18,100 before the change. Full boarding is closer to £54,000, against about £42,500.

Fee inflation has not stopped since. The ISC’s 2026 census recorded a like-for-like increase of 4.4% excluding VAT, and analysis of 424 schools published in August 2026 found average sixth form fees rising a further 4.5% for 2026/27, from £26,550 to £27,734 a year. Schools attribute this to the combination of VAT, higher employer National Insurance contributions and the loss of business rates relief.

Named schools: autumn 2024 versus 2026/27

The table below compares the last VAT-free term (autumn 2024) with what the same schools charge today. Two important caveats before you read it. First, the increase reflects two years of ordinary fee inflation as well as VAT, so it is not a measure of the tax alone. Second, the 2024 column is VAT-free by definition, while the 2026/27 column includes VAT, which is the comparison that matters for what actually leaves your account.

School	Basis	Autumn 2024 termly (no VAT)	2026/27 termly (inc. VAT)	Change
Eton College	Boarding	£17,583	£21,891	+24.5%
Harrow School	Boarding	£17,850	£21,990	+23.2%
Westminster School	Boarding	£17,496	£23,094	+32.0%
Winchester College	Boarding	£17,285	£20,700	+19.8%
Winchester College	Day (sixth form)	£12,789	£15,318	+19.8%
Cheltenham Ladies’ College	Boarding	£18,450	£20,880	+13.2%
Brighton College	Boarding (Y13)	£18,490	£23,187	+25.4%
St Paul’s Girls’ School	Day	£10,531	£12,854	+22.1%
Bromsgrove School	Boarding	£15,490	£18,930	+22.2%
Bromsgrove School	Day (senior)	£6,925	£8,466	+22.3%
King Edward’s School, Birmingham	Day	£6,108	£7,695	+26.0%

The spread is the interesting part. Cheltenham Ladies’ College is up 13.2% over two years, less than VAT alone, because the school rebased its fees downwards. Winchester’s annual report confirms “a net fee decrease of 8% from 1 January 2025 following the imposition of VAT,” which is why it lands just under 20%. Bromsgrove told parents it was discounting fees by 6.3%, “meaning an increase of 12.5% after the addition of the 20% VAT.”

At the other end, King Edward’s School in Birmingham simply added VAT to an unchanged fee. Its 2024/25 schedule shows tuition of £6,108 a term with a line reading “VAT (added Jan 2025) £1,222,” giving £7,330 from January. Eton also told parents in August 2024 that fees would likely rise by the full 20%.

The lesson for parents is that the school’s own choice mattered more than the tax rate. It is worth asking any school you are considering what it did to its headline fee in January 2025, because that single decision explains most of the variation above.

A note on how schools publish fees

Schools present their fees inconsistently, and this trips people up constantly. The large boarding and London schools now tend to quote a single VAT-inclusive figure. Many regional day schools still quote the fee excluding VAT with the tax shown as a separate line, which makes their published numbers look up to 20% cheaper than the amount you will actually pay.

Brighton College publishes both tables side by side and applies what it calls “transitional price support,” so its VAT-inclusive figure is deliberately lower than the ex-VAT fee multiplied by 1.2. Solihull School itemises tuition, VAT, lunch and books as separate lines. King Edward’s Birmingham prints both figures in the same sentence. Always check which basis you are looking at before comparing two schools.

For reference, some current VAT-inclusive day fees where the school does not publish a comparable 2024 figure: Dulwich College £10,706 a term, St Paul’s School £12,666, Manchester Grammar School £6,603, Solihull School £7,458 including lunch and books.

What is taxed and what is not

Not everything a school charges for became standard-rated. The distinction usually turns on whether the supply is education, or something else.

Standard-rated at 20%

Tuition and boarding
Application and registration fees
Extra-curricular activities that are educational in nature
Bursary and partially funded places, on the amount actually paid
Packages bundling meals or transport into a single education fee, which follow the dominant element

Exempt

Nursery and pre-school classes made up wholly or almost wholly of children below compulsory school age
Before and after school childcare and wraparound care that consists of care rather than teaching
Holiday clubs that are childcare based, as opposed to activity classes such as dance
Welfare services involving the care and protection of children
SEND therapies supplied by registered health professionals where the primary purpose is health related
Goods and services closely related to education and for the pupil’s direct use, such as classroom stationery
School meals, where they meet the closely related conditions
Examination services

Outside the scope of VAT

Block grant funding not tied to individual pupils
Genuine donations with nothing given in return

If your school has restructured its billing since 2025, this is why. Separating a childcare charge from a tuition charge can legitimately keep part of the bill VAT free, and it is reasonable to ask whether your school has done this where it could.

Special educational needs

This produces very different outcomes depending on how a place is funded.

If a private school is named in a child’s Education, Health and Care plan and the local authority funds the place, VAT is still charged on the fees, but the authority reclaims it through the existing section 33 refund scheme. The Treasury’s position is that these families are not affected in practice.

If you are self-funding a SEN place, including while an EHCP application is pending or where an EHCP was refused, you pay the VAT with no recovery route. This is the group hit hardest by the change, and no exemption was created for them.

Two narrow points of relief. Therapies delivered by registered health professionals, such as speech and language therapy or educational psychology, remain exempt where the primary purpose is health related, so it can be worth asking your school to invoice these separately rather than rolling them into the fee. And the business rates change in England does not apply to institutions wholly or mainly educating pupils with EHC plans, with Wales operating a similar exception for pupils with an Individual Development Plan.

If your child is waiting on an EHCP decision, ask the school what it does in the interim. Some local authorities will prepay a term where the outcome looks foreseeable, and some schools waive first-term fees in those cases.

Paying in advance no longer works

Between the July 2024 announcement and the start of 2025 there was a rush to prepay fees. It largely failed. Anti-forestalling rules mean that fees invoiced or paid on or after 29 July 2024 for a term starting on or after 1 January 2025 are caught, with the tax point moved to the later of 1 January 2025 or the first day of term.

HMRC also said it would scrutinise fees-in-advance schemes where a lump sum was paid without the specific terms and fees being identified at the time, and that it “stands ready to challenge the validity of such payments.” If your school operated such a scheme and you are unsure whether VAT was correctly charged, ask the bursar for the tax point analysis in writing.

Help with fees

Fee assistance now reaches more than a third of pupils at ISC schools, and the pool of money has grown, but it is being spread differently than before.

	Jan 2024	Jan 2025	Jan 2026
Pupils receiving some fee assistance	182,675 (33.5%)	183,487 (34.5%)	183,705 (34.9%)
Pupils on means-tested bursaries	38,547	39,090	36,676
Average means-tested bursary	£12,909	£13,850	£14,077

The headline to take from this is mixed. The average bursary has risen to £14,077 and more than half of recipients have over half their fees remitted, but the number of pupils on means-tested bursaries fell 6.2% between the 2025 and 2026 censuses. Schools are giving more to fewer families.

Practical implications

Apply even if you assume you will not qualify. Thresholds at many schools moved after 2025, and a household income that was too high in 2024 may not be now.
Ask about hardship funds separately. These are often distinct from the published bursary scheme and are aimed at families whose circumstances changed mid-way through a child’s education, which is exactly the position VAT has put many people in.
Ask what happens at transition points. Awards are frequently reassessed at Year 7 and Year 12, and a school keen to fill a sixth form may be more generous than the same school at 11+.

Managing the cost

Get the ex-VAT and inc-VAT figures separately for every school on your list. Comparing headline numbers alone is unreliable while presentation varies this much.
Check what is unbundled. Wraparound care, holiday clubs and nursery provision should not carry VAT. If they are bundled into a single fee, they will.
Look at the extras, not just the tuition line. Lunch, trips, music lessons and coach transport are charged differently school to school, and at Dulwich, for example, lunch is included for Years 3 to 8 but charged separately from Year 9.
Ask about payment plans. Monthly schemes spread the load but often carry an interest or administration charge. Compare the effective rate against a standard loan before assuming it is the cheaper route.
Consider entry timing. Moving a child at a natural transition, most commonly into the sixth form, is usually less disruptive than mid-phase, and some families now use the state sector to 16 and pay for two years rather than seven.
Do not sign up to any fee prepayment arrangement on the promise of avoiding VAT. That window closed in July 2024, and any scheme still marketed on that basis should be treated with suspicion.
If your child has SEN, pursue the EHCP process properly. A named placement funded by the local authority is the only route that removes the VAT burden from the family entirely.

For context on the scale of the decision, the Institute for Fiscal Studies calculated before the change that average private fees had already risen 20% in real terms since 2010 and 55% since 2003, and that the gap between average fees and state per-pupil spending had more than doubled, from about 40% to about 90%. VAT widened that gap further.

This article is for general information and is not tax or legal advice. Fee figures were checked in September 2026 and change annually. Confirm current fees directly with any school you are considering.

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Sources

Legislation and official guidance

Fee and market data

School fee schedules, 2026/27

School fee schedules, 2024/25 (pre-VAT)

Frequently asked questions

How much is VAT on private school fees in the UK?

20%, the standard rate, applied to tuition and boarding for terms starting on or after 1 January 2025.

Did fees really go up by 20%?

Not universally. On average schools passed on the equivalent of about 14 percentage points, partly because many cut headline fees and partly because they can now reclaim VAT on their own costs. The ONS recorded a 12.7% jump in January 2025. Some schools, including Eton and King Edward’s Birmingham, did pass on close to the full amount.

When exactly did it start?

Terms beginning on or after 1 January 2025. A term that started in November 2024 and ran into January was not caught, but in practice almost every school’s spring term began in early January 2025, so that was the first VAT-bearing bill.

Are nursery and pre-school fees subject to VAT?

No, where the class is wholly or almost wholly made up of children below compulsory school age. Standalone nurseries fall outside the definition of a private school entirely.

Do I pay VAT on wraparound care and holiday clubs?

Generally no, where those services consist of childcare rather than education. Activity classes such as dance can be treated differently.

What about school meals, transport, uniforms and trips?

School meals and transport supplied to a school’s own pupils can qualify as closely related supplies and be exempt. Exam fees are exempt. If meals or transport are bundled into a single education fee, the whole package is standard-rated. Uniform and shop sales follow ordinary VAT rules.

My child has an EHCP. Do I pay VAT?

If the local authority funds the place named in the plan, it reclaims the VAT and you are not affected. If you fund the place yourself, you pay the VAT with no relief.

Can I pay several years of fees in advance to avoid VAT?

No. Anti-forestalling rules from 29 July 2024 catch prepayments for terms beginning on or after 1 January 2025.

Does this apply across the whole UK?

The VAT change applies UK-wide. The business rates element differs: England and Wales removed charitable relief from April 2025, Scotland had already done so in April 2022, and Northern Ireland’s position is set separately under devolved rating policy.

Are grandparents paying fees treated differently?

No. VAT is charged on the supply of education to the pupil regardless of who settles the bill, and the same applies to trust or company arrangements.

Could the policy be reversed?

Possible but not imminent. The government has shown no sign of retreating and the Commons Library recorded no repeal or amendment proposals as of July 2026, though the Conservatives have pledged to scrap the tax if returned to office.