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Telegraph
30-06-2025
- Business
- Telegraph
How much private school fees will rise in September after Labour's VAT raid
Private school fees will rise by more than 17pc in the upcoming academic year thanks to a 'triple whammy' of Labour tax increases, Telegraph analysis shows. The average Year 13 day fees will jump from £21,035 to £24,600 between September 2024 and September 2025, analysis of 228 independent school fees reveals. The majority of the increase is due to Labour's 20pc VAT raid introduced in January when fees rose by around 14pc. However, schools were further stung by an increase in National Insurance and the loss of business rates relief in April, which has forced them to increase fees by another 3.1pc. Across all year groups, fees will rise on average by 17.6pc in September – by far the largest year-on-year increase on record, with early evidence suggesting parents are already pulling their children out of private education. The analysis, which was conducted as part of The Telegraph's value for money private school tool, has cast fresh doubt on the Treasury's claim the policy will raise £1.7bn with this forecast assuming school fees would only rise by 10pc and the exodus into state schools would be minimal. Neil O'Brien, shadow education minister, told The Telegraph: 'So many independent schools in this country are on the brink thanks to Labour's education tax. 'As more face the strain, inevitably more will close, forcing pupils into a state sector that in many places does not have the capacity to absorb them – something that is already happening well beyond the Government's own predictions.' Data from the Department for Education's School Census revealed that across 1,218 traditional private schools, student roll numbers declined by 2.7pc in January 2025 when compared with the previous year. Across all independent schools, the number of students fell by 11,000, four times more than the Government predicted in its policy impact statement. Schools with the most affordable fees saw larger declines, vindicating those who warned that 'scrimpers and savers' would be the most impacted by the tax. Simon Nathan, head of policy at the Independent Schools Council, a trade body, said: 'Many schools took the step of reducing their fees, excluding VAT, in January to try to cushion the impact on parents. 'But schools' options were limited: they were hit with a triple tax whammy of the loss of business rates relief, the rise in National Insurance employer contributions and the requirement to place 20pc VAT on fees. 'The majority of any school's budget would be spent on staff costs, which cannot be reduced quickly nor easily. It seems clear that the Government underestimated the impact their decision to tax education would have on schools, families and children.' Despite this, a government source suggested the blame for fee rises lay with private schools. They said it was a 'commercial decision', and they could have chosen to cut back on 'non-essential expenditure' or 'reduce their surpluses or reserves'. Last week, Moorlands School, a 127-year-old prep school in Leeds, became the latest school to announce its closure as a result of Labour's VAT raid. The prep school's closure follows Bishop Challoner School in Kent, which was forced to shut its doors after losing more than a third of its pupils since last summer's general election. It comes as headteachers warned they had been left with no choice but to lower entry requirements in a desperate bid to attract pupils. One headmaster said: 'Schools where pupils traditionally had to work hard [to gain a place], where it's usually very challenging to secure places, it is less challenging this year.' The Telegraph has been monitoring fees since the 2022-23 academic year from around 1,200 private schools across Britain. The past two years in particular have seen private schools grapple with inflationary pressures, staff pay rises and, now, Labour's tax on education. While a number of schools are yet to publicly reveal their 2025-26 fees, many of Britain's most high-profile institutions have already passed on the VAT raid to parents. Between September 2024 and January 2025, Eton College increased its annual fees from £52,749 to £63,298 a year, implementing the full 20pc raid. Harrow increased its fees by 15pc to £61,584, whilst Charterhouse implemented a 12.4pc increase to £45,018. Dulwich College has announced its fees for 2025-26, increasing their boarding fees from £51,708 in September 2024 to £60,060 in September 2025. Winchester College has seen its annual fees increase by £51,855 to £60,000 per year. However, while the most prestigious private schools have raised fees significantly, there are early indications that student numbers have seen less of an impact than at more affordable schools. The Department for Education's census showed that for Year Eight pupils at the cheapest 25pc of private schools, pupil numbers fell by 4pc in the year to January, compared to a 2.4pc decrease at the most expensive schools. For Year 13 day pupils, the fall in pupils was 3.6pc for the cheapest schools compared to 1.8pc at the dearest. A government spokesman said: 'Before the Government ended private schools' tax breaks, these institutions had, on average, increased their fees by 75pc in real-terms since 2000. 'Ending private schools' tax breaks will raise £1.8bn a year by 2029-30 to help fund public services, including supporting the 94pc of children in state schools to achieve and thrive. 'It will be a commercial decision for individual private schools as to how they manage their finances, in the same way as any other private business.'
Daily Mail
25-06-2025
- Business
- Daily Mail
Private school announces 'devastating' closure after 127 years blaming Labour's tax raid on fees
A small private school has announced it will close after 127 years, blaming Labour's tax raid on fees and other rising costs. Moorlands School in Leeds, which charges up to £4,000 a term, said it will close at the end of the autumn term. The prep school, which is part of the Methodist Independent Schools Trust, educates children aged two to 11. Labour's 20 per cent VAT on fees, which was introduced in January, has led to pupils being priced out and schools struggling to fill places. Today, education minister Jacqui Smith refused to apologise for the policy, although she admitted 'every closure is sad'. In a statement, Moorlands said it had decided to close 'in the face of increasingly difficult economic conditions that are impacting many independent schools.' The school said its 'unsustainable financial position' had been caused by 'VAT on school fees', alongside a number of other factors. Moorlands School in Leeds (pictured), which charges up to £4,000 a term, said it will close at the end of the autumn term These include the withdrawal of charitable relief on business rates, increases in employer National Insurance contributions, rising running costs and a decline in registrations. Parent Jonathan Marsden, whose children attend Moorlands School, said the announcement was 'completely devastating'. He told the BBC: 'We've got to make quick decisions suddenly. It's an absolute disaster for everybody involved. 'It is incredibly difficult to explain to a seven-year-old over breakfast that they need to change school in a matter of weeks.' A number of other small private schools have announced closure over the last few months, blaming the tax. These include Queen Margaret School for Girls in York, which will close next month. Today, Baroness Smith was asked in the House of Lords to 'apologise' to pupils at schools facing closure 'because of the Government's cruel policy'. She answered: 'No I won't. 'This was a decision made by this Government in order to be able to invest in the over 93 per cent of our children who are educated in state schools. 'Yes, every closure of a school is sad. I can understand why people would be distressed if their school closes. 'I do note, however, that it has always been the case that approximately 50 mainstream private schools close each year.' She added that in the last year, 79 new private schools opened, against a historic ten year average of 75 schools per annum. It comes after Keir Starmer admitted earlier this month on X that at least some money raised from the tax would be siphoned off to pay for housing. The Department for Education said: 'Ending tax breaks for private schools will raise £1.8 billion a year by 2029/30 to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive.'
BBC News
24-06-2025
- Business
- BBC News
Moorlands private prep school in Leeds to close after 127 years
A private school in West Yorkshire is to close at the end of the autumn term, blaming VAT on fees and rising budgets for its "unsustainable position".Moorlands School in Leeds will close on 31 December, 127 years after it opened in to a statement from the school, the decision to close was agreed by trustees on Wednesday "in the face of increasingly difficult economic conditions that are impacting many independent schools and show little sign of abating".The Department for Education said: "Ending tax breaks for private schools will raise £1.8bn a year by 2029/30 to help fund public services, including supporting the 94% of children in state schools to achieve and thrive. The school said its decision "followed a period of careful reflection and a thorough review of the school's financial viability".It added: "VAT on school fees, alongside a decline in enquiries and registrations, the withdrawal of charitable relief on business rates, increases in Employer National Insurance contributions, the limited ability of a small school to reduce fixed costs, and the rising budgets required for the upkeep of the school site and buildings, have sadly all contributed to an unsustainable financial position."The prep school, which is part of the Methodist Independent Schools Trust, educates children aged two to 11. 'End of an era' The statement added the decision was not a reflection of the school's staff or governing body, and teachers would continue to ensure education and activities continued said: "Moorlands has been a special place of learning, growth, and community. The history, character, and culture of the school have shaped generations of pupils."While this marks the end of an era, the values and memories created here will remain with all those who have been part of its story."A statement from nearby Richmond House School, which is also privately run, reassured parents it remained in a "strong and secure financial position".A spokesperson said: "We are deeply saddened to learn that Moorlands School will be closing in December 2025, and our thoughts are very much with the pupils, families and staff affected by this news."Richmond House School is in a strong and secure financial position, with robust reserves and healthy pupil numbers throughout the school."Anna Coulson, headteacher at the Froebelian School in Horsforth said she was "deeply saddened" to hear Moorlands School would be closing."Our thoughts are with the families, children and staff affected by this unexpected announcement, and we extend our heartfelt support to all those now facing a period of uncertainty and change," she said.A spokesperson from the Department for Education said about 50 mainstream private schools typically closed every year."Local authorities and schools commonly support children and parents in these circumstances," they said. "We are confident in local state schools' ability to accommodate new pupils." Listen to highlights from West Yorkshire on BBC Sounds, catch up with the latest episode of Look North.
BBC News
23-06-2025
- Business
- BBC News
Fears for Fettes College jobs after VAT added to school fees
One of Scotland's top private schools has confirmed jobs could be lost as it looks to cut College in Edinburgh - which counts former Prime Minister Tony Blair among its alumni - said the introduction of VAT on school fees was one of the reasons it was faced with the "difficult" private schools did not have to charge VAT on their fees because of an exemption for organisations providing education but that was removed on 1 Scotsman newspaper reported Fettes had now opened a consultation process, for both teaching and operational staff, in order to reduce its head count. The school's most recent accounts show it had 751 students in August, down from 780 the previous April, the High Court in London heard the government's policy of adding VAT to private school fees would "interfere with the fundamental right to education".And last month he it emerged private school fees were 22.6% higher on average in January compared with a year ago, according to the body that represents most independent schools in the UK. Fees for boarders at Fettes College can cost up to £18,000 a year, inclusive of Labour government imposed VAT on private school education and boarding fees to pay for more state school teachers in argue removing the VAT exemption will benefit the wider education sector, including the 94% of pupils who attend state Fettes College said the sector was facing a "tough time".A spokesman said: "Various factors have conspired to increase costs on all organisations and schools are not immune, particularly with the recent imposition of VAT on school fees and rise in national insurance contributions."He added that the consultation process started in spokesman said: "This difficult decision may result in some redundancies."
