ARTICLE · 11 OCTOBER 2024

Private Schooling In UK Will Become VATable

DLA Piper UK LLP

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The UK Labour Government will impose a 20% VAT on private school fees starting January 1, 2025. Anti-forestalling measures apply from July 29, 2024, to prevent pre-payment avoidance. Schools must register for VAT and manage VATable/exempt services to mitigate financial impacts.

United KingdomTax

Richard Woolich

On 29 July 2024, the new UK Labour Government announced that from 1 January 2025, all education services, vocational training, and boarding services supplied by private schools (or connected persons) will be subject to VAT at the standard rate of 20%.

An anti-forestalling measure will also be introduced, applying 20% VAT to pre-payments of fees from 29 July 2024 to 30 October 2024 for school terms starting on or after 1 January 2025. This prevents parents from avoiding the additional VAT cost by paying fees in advance. HMRC say that advance payment of fees made before that time needed to be earmarked to trigger an early tax point. The government has published draft changes to VAT legislation and an Explanatory Note for technical consultation, which runs from 29 July 2024 until 15 September 2024.

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