Parents prepay 500m in private school fees to avoid Labour's VAT hike
Briefly

Parents at leading private schools in the UK prepaid over £500 million in fees to avoid Labour's new 20 percent VAT on private school fees. This amount is significantly higher than the £121 million paid in the previous year. The prepayments occurred before the 1 January 2025 deadline, with some families paying up to five years in advance to avoid the tax. Tax experts estimate that this approach may have legally saved families as much as £103 million in VAT, impacting the government's projected revenue from this policy.
Parents at Britain's leading private schools prepaid over £500 million in school fees to avoid Labour's new 20 percent VAT charge, significantly impacting projected government revenue.
The UK’s top 50 independent schools collected £515 million in advance fees during 2023, sharply up from £121 million the previous year.
Tax experts estimate families may have legally avoided up to £103 million in VAT by prepaying fees, with the potential for higher figures across all independent schools in the UK.
The surge in prepayments includes prestigious institutions like Eton College, which received £52.7 million, and Winchester College, which saw a jump to £19 million in advance fees.
Read at Business Matters
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