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ARTICLE · 13 NOVEMBER 2024

Independent Schools And Legacy Disputes

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Starting January 2025, UK private schools face new VAT and business rate obligations, creating a financial strain. Increasing legacy donations and implementing robust dispute management strategies can help schools mitigate financial challenges and secure future funding.

United KingdomConsumer Protection
Philip Reed
Philip Reed
Paul Hewitt
Paul Hewitt
Natasha Stourton
Natasha Stourton
Emma Flower
Emma Flower
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Challenges to fee-dependency in independent schools

Currently, the vast majority of schools are exempt from VAT under the VAT Act 1994, which states that the provision of education or vocational training by an 'eligible body', and goods or service closely related to the supply of education or vocational training, are exempt from VAT.

Further, if a school is a registered charity – as around half of them are – it is eligible for an 80% discount on the business rates liability of its property, provided that that property is used wholly or mainly for charitable purposes.

His Majesty's government has said that from 1 January 2025, private schools will no longer be eligible for the VAT exemption or for business rates relief. This will inevitably put pressure on finance and highlights the need for fundraising beyond the charging of fees.

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