There has been a great deal of discussion in the press about the Government’s announcement of their proposal to apply 20% VAT on Independent School fees from January 2025. Here we share with you the action we have taken to date and along with some answers to frequently asked questions.
What we are doing
The RAF Families Federation had an opportunity to contribute to HM Treasury’s consultation that closed on the 15 September 2024. We asked for your views on the proposal and we were overwhelmed with the responses to our request for comments; we received over 100 responses highlighting how the proposed increases will affect our RAF families.
Thank you to everyone that took the time to share their views this helped us to put together our response to the consultation.
Changes to VAT on Independent School fee FAQs
To help keep you as informed we have put together a short set of FAQs that we hope you find useful:
Are State Boarding schools affected by the increase?
The draft policy outlines that this increase is only applicable to private schools and that state schools are exempt: 2.12 Education and boarding provided by state schools (including academies) are not affected by this policy change, meaning they will continue to be exempt from VAT. This reflects the fact that state schools and academies will continue to be “eligible bodies.”
Are there proposals to mitigate the VAT increases for Armed Forces personnel?
The draft policy only notes that the Government will closely monitor the impact for those Service personnel who claim Continuity of Education Allowance (CEA) and states that the upcoming spending review is the right time to consider any changes to the scheme.
How will this proposal affect my Continuity of Education Allowance(CEA) claims?
The MOD annually reviews CEA. To calculate the rate they review the cost of fees across a percentage of the schools to determine how much CEA will increase each year. It hasn’t been shared with us if the MOD will do an additional or earlier review. Until they provide further guidance, the CEA rate, and timing of payments, will remain the same.
What can I do to limit the impact on our family?
We encourage you to speak to your school Bursar to discuss with them how they will apply the increases.
