31.07.2024
On Monday 29 July, the British new Labour government announced a legislative initiative which stipulates that British independent schools will have to add 20 % VAT (Value Added Tax) to the school and boarding school fees they charge parents from 1 January 2025.
Although these plans have been in the air for some time and have not caught British boarding schools unprepared, the speed with which the VAT proposal is being implemented has surprised everyone involved. The Labour government's draft budget with this tax change is expected to be put to a vote in Parliament at the end of October 2024, with the aim of VAT being levied on school fees from 1 January 2025.
Each school will decide for itself to what extent the additional VAT will be passed on to parents (see also our news from 7.6.24). With very few exceptions, however, schools will have to pass on at least part of the new tax to parents, starting with the fees for Lent Term 2025. School fees paid in advance after the announcement on 29 July as part of a ‘Fees in Advance Scheme’ for the entire school year 2024/2025 will be taxed retrospectively. The government's notice has been clear about this.
