Private School Fees Tax: Just a Drop in a £50bn Fiscal Black Hole

VAT on Private School Fees: A Tiny Drop in a Huge Black Hole

Blick Rothenberg, the big‑name audit, tax, and business advisory firm, is flushing out the facts behind the government’s VAT push on private school tuition.

What They’re Saying

Government estimates: £460 million added in 2024/25, rising to £1.7 billion by 2029/30.
But the fiscally draining hole is a whopping £50 billion a year.
So the VAT bump is less than 1% of the gap they’re trying to fill.

Fiona Fernie’s Take

Partner Fiona Fernie points out that the real tax slip‑throughs are far bigger.

Small businesses are throwing £28.1 billion into the exchequer’s drain each year due to wrong tax amounts.
“The government’s forecasts for VAT gains from private schools are probably a tad inflated.”

The Bottom Line

VAT on private school fees is just a courtesy, not a cure. The bigger problem lies elsewhere, and the tax authorities might have to roll up their sleeves.

VAT on private school fees will put more strain on Special Educational Needs system already at ‘crisis point’

Parents are concerned school fees will get harder as VAT bites

Chancellor’s ‘vindictive school’s tax’ forces a private school with 270 pupils to close

Private School Shut Down: Tax Trouble for Rich and Poor Alike

When the Tax Changer—uh, VAT—rolled out, everyone from Wall Street bigwigs to first‑time parents thought it would be a smooth ride. Instead, it turned into a roller coaster that’s left a lot of families either buckling up or losing the seat entirely.

Who Bailied Out?

High‑rolling parents: They pre‑payed their children’s tuition before the deadline, tripling the payments to 4.25 times last year’s total.
Average folk: Not so lucky. Many are already stretching their budgets, and now the tax hit could push them out of the pay‑party.

Why The Tax is a Double‑Edged Sword

Input VAT Recovery: Schools could offset their costs for new buildings and gear, which means the government takes in less money.
Chancellor’s claim: “We’re targeting the wealthiest,” said Rachel Reeves. Sadly, the reality shows that even middle‑class families feel the squeeze.

School Closures & Rollover Chaos

Astonishingly, reports say 77 schools have either shut down or announced their closure. That creates a dilemma for over 13,000 kids who suddenly have to pack up their bags.

What Happens Next?

The kids might swirl back into the state‑school roster.
Some families may not find a place that offers the specialized services they need.
Others are left feeling priced out, as the parents scramble for a replacement.

Overall, it looks like the Treasury may have underestimated how many pre‑payments and closures will actually churn out. If the numbers hold true, the tax challenge is not just a bridge too far—it’s a full‑blown wrecking ball.