Private Education: VAT
The question
To ask the Chancellor of the Exchequer, whether she plans to apply VAT to small private schools offering Montessori education where pre-school age children are in the same classes as older children.
Answered by James Murray
From 1 January 2025, the 20% standard rate of VAT will apply to all education services, vocational training, and boarding services provided by private schools for a charge. This will apply to any fees charged after 29 July 2024 for terms starting after 1 January 2025.
The government has listened to feedback regarding the definition of “nursery class” used in the draft legislation. To ensure the legislation achieves the policy intent of keeping nursery education exempt from VAT across the UK, the definition of a nursery class has been amended to: “a class that is composed wholly (or almost wholly) of children who are under compulsory school age or, in Scotland, school age, and would not be expected to attain that age while in that class”. Therefore, providing the majority of children in the nursery class are under compulsory school age and aren’t expected to turn compulsory school age that year, the whole nursery class will remain exempt from VAT. Nursery schools not attached to a private school will remain exempt from VAT, regardless of the age of their pupils.
Further detail can be found in the government’s summary of responses published here: Government_Response_to_the_Technical_Note_on_Applying_VAT_to_Private_School_Fees_and_Removing_the_Business_Rates_Charitable_Rate_Relief.pdf
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