VAT on private school fees

What VAT is charged on private school fees

Private schools charge VAT at 20% on education and vocational training they supply for a charge. Boarding supplied by the school is standard rated too. Before 1 January 2025 both were exempt. State schools, academies, free schools, colleges and universities are not affected.

A private school here means a school that charges fees and is not a state school. Academies, free schools and local authority schools are state schools. Further education colleges and universities sit outside the change as well.

To add VAT to a fee, or find the VAT inside a VAT-inclusive bill, use the VAT calculator or the reverse VAT calculator.

These are examples of the tax only. Schools decide their own fees, and some absorbed part of the VAT rather than passing it all on.

Worked example

Say a termly fee is £7,500 before VAT. £7,500 × 20% = £1,500, so the bill is £9,000. To go the other way, divide the VAT-inclusive bill by 1.2: £9,000 ÷ 1.2 = £7,500, so the VAT inside it is £1,500. Over three terms that is £4,500 of VAT a year.

Were fees paid early caught

Yes, if they were invoiced or paid on or after 29 July 2024. Fees for a term starting on or after 1 January 2025 still carried VAT, due on the first day of that term. Fees paid before 29 July 2024 for later terms were not caught.

Some parents tried to pay fees for future terms before VAT applied. The legislation was written to catch this.

What does the VAT cover

VAT covers tuition, boarding and goods and services closely related to the education, when the school supplies them to its own pupils. Education supplied by a person connected with the school is caught too. Extra-curricular activities a school charges for are generally standard rated.

In full, the standard rated supplies are:

• tuition and vocational training supplied by the school for a charge
• boarding and lodging closely related to the education the school provides
• goods and services closely related to the education, supplied by the school to its own pupils
• education supplied by a person connected with the school

What stays exempt

Nursery classes made up wholly, or almost wholly, of children below compulsory school age stay exempt, even inside a fee-paying school. Separate nurseries for under-5s stay exempt as before. Healthcare from registered professionals, such as speech therapy, can be exempt when supplied separately.

• Nursery classes made up wholly, or almost wholly, of children below compulsory school age: exempt.
• Separate nurseries for under-5s: exempt, as before.
• Education at state-funded schools, further education colleges and universities: not affected by this change.
• Healthcare from registered professionals (such as speech therapy), when supplied separately: can be exempt under the health rules.

HMRC's guidance gives the example of a nursery class where 90% of children are below compulsory school age. That class stays exempt even if it sits inside a fee-paying school.

Pupils with an EHCP

An Education, Health and Care Plan (EHCP) sets out the support a child with special needs must get. Where a local authority pays fees because a pupil's EHCP requires a private school place, the school still charges VAT. The local authority can reclaim it from HMRC, so the cost does not fall on the family or the authority's budget.

Parents who choose and pay for a private place themselves pay VAT in the usual way, even if their child has an EHCP.

Does a private school have to register for VAT

Yes, once its taxable turnover goes over £90,000 in a rolling 12 months, or is expected to in the next 30 days alone. Private schools follow the normal registration rules. Almost every fee-paying school passed that point when fees became taxable.

Once registered, a school files returns through Making Tax Digital software. See the VAT registration threshold guide for how the two tests work, and Making Tax Digital for VAT for the filing rules.

Can private schools reclaim VAT on their costs

Yes. Becoming taxable means a school can reclaim VAT on costs such as building work, equipment, utilities, catering supplies and professional fees. If it also makes exempt supplies, such as an exempt nursery class, it reclaims only the taxable share, using a partial exemption method.

Normal pre-registration rules apply. A school can reclaim VAT on goods bought in the four years before registration if it still has them and uses them for taxable supplies. It can also reclaim VAT on services bought in the six months before registration.

Large building projects may be capital items under the Capital Goods Scheme. From 29 July 2026 the threshold for land and buildings is £600,000 or more, excluding VAT. Projects below that are reclaimed once, with no later adjustments.

Does the business rates change affect VAT

No. Private schools in England with charitable status lost charitable relief from business rates from April 2025. That is a local tax change, not a VAT one, and it does not change how a school charges VAT. Schools with charitable status faced both changes in 2025.

What to do next

• Parents: check each invoice shows the VAT separately, and use the reverse VAT calculator to check the sum.
• Schools: read HMRC's guide to charging and reclaiming VAT on private school fees for specific supplies.
• Schools with an exempt nursery class: agree a partial exemption method so you reclaim the right share.
• Schools planning building work: check the project against the £600,000 Capital Goods Scheme threshold.

This is general guidance. Check gov.uk or ask an accountant about your own case.

Figures in this guide come from our rules file, last checked against HMRC on 4 October 2026.