Number of private school pupils plummets after Labour’s VAT hike on fees
Private school pupil numbers have plummeted by 30,000, down nearly 7 per cent in some year groups, since Labour introduced VAT on fees.
As of 1 January 2025, private school fees in the UK, including tuition and boarding, are subject to 20 per cent VAT, a change announced by Chancellor Rachel Reeves in her 2024 Autumn Budget.
The change to the tax code sparked an outcry from parents of children with special educational needs (SEN) and from those who operate faith schools. Campaigners tried and failed to seek legal action against the Treasury last year, but a judge ruled that the VAT change did not sufficiently infringe on pupils’ human rights.
New figures from the Independent Schools Council (ISC) census, conducted in January, are due to be published this month. But government officials, according to The Times, have predicted that private school numbers would fall by 37,000 in the long run because of VAT, but they are already 30,000 lower.
The data revealed that numbers starting in Year 12 fell by 6.6 per cent, while Year 1 also fell by 6.6 per cent, and Year 3, the intake year for most prep schools, dropped by 6.2 per cent.
Sonya O’Reilly, head of independent schools and partner at Birketts, stated, “For many schools, these pressures present a real commercial and operational challenge at a time when demographic trends are already tightening the market.”
“However, throughout challenging times, the independent schools’ sector has long demonstrated an ability to adapt, whether through refining fee models, maximising the commercial use of their estates, innovating in curriculum or forging new partnerships.”
Nearly 100 private schools closed
Data released earlier this year showed that 100 private schools have announced their closure since VAT was introduced, including Thetford Grammar in Norfolk, Malvern St James in Worcestershire and Palmers Green High School for Girls in North London.
While St Wilfrid’s in Exeter said on Tuesday that it would close at the end of the Summer term because of an increase in rental costs.
Even Edinburgh-based Fettes College, where former Prime Minister Tony Blair is among alumni, said the introduction of VAT on school fees contributed to the “difficult” decision to “right size our staffing model” after pupil headcount dropped.
Speaking at the time, Julie Robinson, chief executive of the Independent Schools Council, said: “We are likely to see further closures over the coming months and years as the effects of VAT and other tax measures mount up.”