VAT drives down private school enrolment

May 27, 2025

Private schools in the UK have seen a notable drop in pupil numbers following the introduction of VAT on school fees this January. New data from the Independent Schools Council (ISC) shows a 2.45% fall in enrolments, down from 551,578 pupils at the start of the academic year to 538,215 by January 2025 – a decline of over 13,500.

This sharp drop contrasts with Government forecasts made when the policy was first announced in July 2024, which estimated a decrease of just 3,000 pupils. The number of new pupils has also declined over time, with 2,939 fewer students enrolling in ISC schools between the 2023/24 and 2024/25 academic years.

Fee increases have been significant. The average day school fee rose 22.6% year-on-year, from £6,021 in January 2024 to £7,382 in January 2025. While a 2.6% increase reflects broader inflation, most of the rise is due to schools passing on the full 20% VAT charge to parents. Last year’s average fee increase of 8% already reflected rising costs.

Most private schools now charge between £3,000 and £6,000 per term, with only 60 charging under £2,000.

The VAT policy has triggered strong opposition, leading to a three-day High Court hearing in April. The case, involving several top King’s Councils, will determine whether applying VAT to school fees breaches student’s human rights. A ruling is expected later this year..

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