Three private schools in Croydon have announced they will cut their current fees from January 2025 onwards, to help counter the impact of the government’s new VAT charge on fee paying education.
Whitgift School, Croydon High and Royal Russell informed parents and guardians of the pupils at their schools of the decision after the government lifted the tax exemption as part of their manifesto.
In July, the government announced that, as of 1 January 2025, all education, boarding, and vocational training provided by private schools in the UK will be subject to VAT at the standard rate of 20%.
Whitgift is a 1,500-pupil school for boys aged 10 to 18. At the beginning of 2024, the school raised its fees by 6.5%. In 2025, it will be reducing fees “back to the 2023 fee level” in order to “help parents cope with the 20% VAT imposed by the government”.
Croydon High School is an independent fee-paying day school for girls aged 3-18, with 745 pupils, costing up to £21,303 for one academic year.
Royal Russell is a 900-pupil mixed day and boarding school for three-year-olds and upward, and currently charges up to £23,913 per year for older day pupils.
The cost of attending all of the above schools will rise in January 2025. However, by reducing the original fee before VAT is applied, parents and guardians will not have to shoulder the extra 20% tax in full.
In a statement to parents, Andrew Halls, the headmaster at Whitgift, said: “We are very aware of the additional costs to parents caused by VAT on fees being added from January 2025 – and we want to help.
“We are reducing our current fee back to our 2023 fee level. This means that when we add VAT in January 2025, the new addition will equate to a 12.7% increase on the current fee, rather than the 20% it would have been had we not made this reduction.
“This new, reduced-level fee will become the basis for any fee changes from the following academic year, 2025-2026, too.
“It is likely we will need to make an inflation-related increase for the 25-26 year, as we think almost all schools will do.
“We hope parents will take comfort from the fact we do not plan to increase the level of our base fee before inflation, and this should mean families will be able to rely on the Whitgift fee being held in as tightly as we can manage in these difficult times.”
Other private schools across the UK have announced similar arrangements. The government estimates that overall, private school fees will rise by around 10% in 2025.
The government has also estimated it would raise £460m extra to spend on state schools next year, rising to £1.7bn by 2029/30.
During the Autumn Budget on October 30, Chancellor Rachel Reeves said the money raised would help “provide the highest quality of support and teaching” in the state sector.
According to the Office for Budget Responsibility (OBR), an estimated 37,000 children will leave private school as a result of not being able to afford the new fees. This is around 6% of the total amount of children currently in private education in the UK.
