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Saturday, Jul 05, 2025

Private Schools Face Enrollment Decline Due to Impending VAT on Fees

Private schools in the UK are experiencing a 1.7% enrollment decline, largely due to the impending VAT on school fees. If this trend continues, it could add over 10,000 students to state schools and cost the Department for Education in England approximately £80 million. Additionally, the birthrate decline has also contributed to lower enrollment in both private and state schools.
The enrollment of private schools in the UK has dropped by 1.7% as of the last school year, attributed largely to the upcoming imposition of VAT on school fees.

This is according to a survey by the Independent Schools Council (ISC) covering 1,185 member schools.

The ISC warns that this decline might result in over 10,000 students transitioning to state schools, potentially costing the Department for Education (DfE) around £80 million in England.

Nevertheless, state schools are also experiencing declining enrollments due to a decreasing birthrate, as seen in a 2.3% decline in primary school applications and a 1.7% decline in secondary applications.

The Institute for Fiscal Studies (IFS) projects that VAT could eventually cause up to 7% of private school pupils to shift to state schools.

The additional revenue from VAT and the end of business rates exemptions, estimated to be £1.5 billion, is intended to recruit 6,500 state school teachers.

The ISC is considering legal action against the VAT policy and seeks to collaborate with the government to address its implications, especially its expected January implementation and its effects on students with special educational needs.
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