Boarding schools in the United Kingdom have long been associated with tradition, opportunity, and success. They offered students not only an excellent education but also the chance to grow personally and gain international experiences. For many families, a boarding school placement represented a significant investment in their child’s future – an investment that often opened doors to new and exciting chapters in life. Historically, British boarding schools were registered as Charities (offering education) and so were exempt from taxation, and they also benefited from business rate relief in the UK. In turn, any surplus they made did not go to shareholders, as they were not businesses – it went back into the school as reinvestment in the children’s future.
We have always been mindful that the choice of a boarding school abroad always required careful financial planning.
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From January 2025, important changes came into effect in the UK that impacted the cost structure of private schools, including boarding schools.
The British Labour government, elected in July 2024, in a bid to raise taxable income for central government, introduced legislation requiring private schools to charge Value Added Tax (VAT) on school fees. The VAT rate in the UK stands at 20%. This change, which was confirmed in late October 2024, brought several consequences:
- From January 2025 onwards, VAT has been charged on tuition fees as well as boarding costs (accommodation and meals).
- Families were not able to avoid VAT by paying fees in advance for periods after January 2025.
- All invoices relating to terms or services from January 2025 onwards have been subject to the 20% VAT rate.
- Each school decided individually how much of the additional cost to pass on to families. Some institutions introduced efficiency measures to reduce the overall financial impact, meaning that in certain cases, fees remained stable or only increased modestly.
- At the same time, the introduction of VAT gave schools, for the first time, the opportunity to reclaim input VAT on certain expenses, which in some cases helped offset costs.
- For many schools who absorbed some of the onward costs to parents, the net income has gone down slightly, but the overall cost to clients has gone up.
Throughout this period, we remained in close contact with our partner schools and we still monitor developments carefully. Families can be assured that we were committed to ensuring their child’s boarding school experience in the UK remains as rewarding and successful as possible. Our priority was – and continues to be – to provide comprehensive support throughout the process and to respond to the individual needs of each family.
Our staff have very close contact with all our schools and have a deep understanding of the financial landscape of the United Kingdom. We would be happy to explain more in face to face discussions.
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How can we help you?
Julia Wilmes
Managing Director
Supporting families through these important steps in their children’s educational journey has become my heartfelt mission since founding Akademis. That is why it is especially important to me that we dedicate ourselves to every student seeking a boarding school with empathy and personal care.
