Effective January 2025, the UK government applied 20% VAT on private school fees. Some schools had absorbed part of the increase, others passed it through fully. The market has settled to roughly a 15 to 18% effective fee increase for most families.
The policy
Effective January 2025, the UK government applied 20% VAT on private school fees. Some schools had absorbed part of the increase, others passed it through fully. The market has settled to roughly a 15 to 18% effective fee increase for most families.
How schools responded
Schools split into three groups. Premium urban day schools (Westminster, St Paul's, Eton) largely passed VAT through; demand for their places remained robust. Mid-market schools absorbed more of the cost; fee increases averaged 12 to 15%. Some smaller schools absorbed almost all of the VAT and have struggled financially.
Impact on international families
Most international families paying UK boarding fees through corporate packages have seen their employers extend the school fee allowances. Self-funded international boarding families have felt the impact most directly.
Impact on domestic families
The most significant impact has been on UK domestic families at the margins of private school affordability. Some have moved to grammar schools or strong state options; others have remained.
The market in 2026
Most analysts believe the market has now stabilised. Fee growth in 2026 has returned to pre-VAT inflation rates. Specific schools at the margins continue to adjust.
Related
See UK school fees VAT impact 2026 and moving to the UK with children.