On July 29th, 2024, the UK government announced that private schools would be subject to Value Added Tax (VAT) starting from January 1, 2025. Prior to this change, private schools in the UK were exempt from VAT under the Value Added Tax Act of 1994.
The purpose of this new measure is to increase public education funding, which will improve resources for children attending state schools.
Although the VAT rate is the same across affected schools, how each school will change fees will vary. The VAT rate is 20%, which will be added to tuition fees. Some schools may choose to pass on the full cost to students through tuition increases, while others may absorb part of the cost in other ways. Schooling prepayments from July 29 forward, for the term starting in 2025, are also subject to VAT.
It is important to note that when private school fees are paid by an employer, they are considered taxable to the employee. This means the fees will need to be grossed up for most inbound expatriates, potentially increasing the overall cost to both the employer and the employee.
Schools are still in the process of finalizing their decisions and AIRINC will continue to monitor the situation closely and ensure that our clients are kept informed about our approach moving forward.
If you have any questions, please feel free to contact your client engagement representative for further clarification.
Education for a global employee’s children can be an important deciding factor on whether they accept an assignment. And it can be a very large expense if their children need to go to an international school. We give you concise information with the upfront and ongoing costs of schools worldwide, so you can evaluate what level of support to provide
Each AIRINC Education Report provides a summary of costs for a representative list of international schools in a given location. Data is collected by our in-house research team and updated annually. Each Education Report:
- Provides cost information for each school, including tuition and fees for kindergarten, primary, and secondary levels, broken down into annual and one-time payments.
- Provides average school costs in addition to individual school costs
- Provides links to websites
AIRINC Education Reports help you:
- Increase Efficiency – By eliminating the need for ad hoc research, they save you time and reduce administrative costs.
- Maintain Objectivity – By providing an independent source of information you can rely on, they remove the uncertainty from decisions about education.
- Improve Cost Estimation – By providing consistent and reliable information, they streamline the process of creating cost estimates
- Sample report:
