VAT Registration for Private Schools

Since 1 January 2025, private school fees have been subject to VAT at 20%, which means many educational establishments now need to register for VAT for the first time. If you run a private school and your fee income exceeds certain thresholds, you must register with HMRC and start charging VAT on...

Who needs to register for VAT

You must register for VAT if you're a private school (or a connected person) that supplies education services, vocational training, or boarding services, and either:

Your total taxable turnover for the last 12 months is over £90,000, or
You expect to receive payments over £90,000 in the next 30 days

Taxable turnover is the total value of everything you sell that is not VAT exempt or outside the scope of VAT.

What counts as a private school

For VAT purposes, a private school is any school or institution that provides full-time education for a fee to either:

Pupils of compulsory school age, or
16 to 19 year olds, where that institution is wholly or mainly concerned with providing education suitable to that age range

This definition includes:

Private schools
Independent schools
Private sixth form colleges

Important exception: Nursery classes provided by private schools consisting wholly, or almost wholly (90% or more), of children under compulsory school age remain exempt from VAT. If you run a school that only provides nursery education, you will not need to register for VAT.

What services are now subject to VAT

From 1 January 2025, VAT at the standard rate of 20% applies to:

All education services and vocational training provided by private schools for a charge
Boarding services provided by private schools
Registration fees paid during the application process to attend a school

When you must register

The exact date when you need to register depends on the value and timing of school fee payments you receive for terms starting on or after 1 January 2025.

If you've exceeded £90,000 in the previous 12 months

You must register within 30 days of the end of the month in which you exceeded the threshold. Your effective date of registration will be the first day of the second month after you went over the threshold.

If you expect to exceed £90,000 in the next 30 days

You must register within the next 30 days. Your effective date of registration will be the date you realised you would exceed the threshold.

Important: You cannot charge VAT or produce VAT invoices until you have registered for VAT. However, you can increase your prices to account for the VAT you'll need to pay to HMRC.

If you fail to register for VAT when required, you may face a late registration penalty.

How payments received at different times are treated

The VAT treatment of school fees depends on when the payment was received.

Payments received before 29 July 2024

Payments made before 29 July 2024 are treated according to the specific terms of the payment agreement. Where the payment creates a tax point (the point at which VAT becomes due) when the payment is made, no VAT is due. A tax point is normally created when a service is performed or a payment is taken.

Payments received from 29 July 2024 to 29 October 2024

Fee payments received between 29 July 2024 and 29 October 2024 for school terms starting from 1 January 2025 onwards become subject to VAT from the later of either:

The first date of the school term that the fees have been paid for, or
1 January 2025

Example: You received £100,000 on 28 October 2024 for private school education for the term starting 6 January 2025. As this is not yet considered subject to VAT, you don't need to register immediately. However, these payments will become subject to VAT on 6 January 2025 when the term starts. This means that on 8 December 2024 (30 days before 6 January 2025), you become aware that you will be over the £90,000 threshold and must register for VAT. You have 30 days from 8 December 2024 to register. You must also pay any VAT due on fees paid from 8 December 2024, even before receiving your VAT registration number.

Note: Non-maintained special schools have different rules for this period based on when tax points are created under their specific payment agreements.

Payments received on and after 30 October 2024

Any fees received from 30 October 2024 for school terms from 1 January 2025 onwards are subject to VAT on the date you received the payment.

You need to notify HMRC within 30 days if you realise the payments you receive will exceed £90,000 in the next 30 days. If they won't exceed this amount, you must notify HMRC within 30 days of the end of the month that your total payments exceed £90,000.

Calculating your taxable turnover

When calculating your taxable turnover from the past 12 months:

Only include school fees relating to school terms starting on or after 1 January 2025
Include fees from 30 October 2024 when they are received
Include fees received between 29 July 2024 and 29 October 2024 from the later of either 1 January 2025 or the start date of that term

Connected persons

The VAT registration requirement also applies to "connected persons" – organisations linked to the private school. The test for whether a person is a connected person is set out in section 1122 Corporation Tax Act 2010. An eligible body may also be treated as connected where arrangements have been put in place mainly to benefit from VAT exemption on supplies that should be taxable.

Getting help

HMRC provides a checking tool to help you work out when you need to register for VAT for private school fees. HMRC also hosts live webinars about VAT on private school fees, covering when you need to register and which goods and services you need to charge VAT on.

Sources

Check if you must register for VAT if you receive private school fees

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.