January 2025 saw the promised 20% VAT on private and international schools across the UK.

Dean Associates’ comprehensive review of the impact of VAT on independent schools fees has shown that schools have varied their response to the government levy.  These can be broadly categorised in three areas:

1 – the school has passed on the full 20% increase to the parents.  This has often been seen where the school is confident that their market will not be impacted by a rise in fees.

2 – the school is lowering the level of fee increase in recognition that they can reclaim VAT against a variety of costs – both future and historic capital costs.

3 – the school has lowered its fees and then charges the 20% VAT on those lowered fees.

Overall, we have seen an average increase of around 11% in the fees from January 2025.

Initial feedback from schools has shown that in the main urban areas, where many of our families tend to move, the numbers within senior schools have not been affected – with the London secondary school market especially competitive and showing increased demand.

However, junior schools do seem to be showing a more varied picture and we would expect there to be some pressure on rural independent schools to fill spaces with the additional charge.

There is a sense that schools are taking a “holding position” for the remainder of the academic year to see how affairs develop and we will be reviewing 2025/6 school fees when they are released in the Spring.