Check if you must register for VAT if you receive private school fees
If you're an education provider, check if and when you need to register for VAT to prepare for VAT being chargeable on school and boarding fees.
This guidance is based on the technical consultation and draft legislation announced in the written ministerial statement of 29 July 2024 regarding the intention to remove the VAT exemption from private schools.
This guidance will be updated if any policy or legislative changes are announced at Budget 2024.
From 30 October 2024, school and boarding fees for school terms starting on or after 1 January 2025 will be taxable at the standard rate of VAT of 20%.
Education providers that charge school and boarding fees must check if they need to register for VAT because of these changes.
Who must register for VAT
You must register for VAT if you’re a private school or connected person that supplies education services, vocational training or boarding services and either:
- your total taxable turnover for the last 12 months is over £90,000
- you expect your total taxable turnover to go over £90,000 in the next 30 days
Taxable turnover is the total value of everything you sell that is not VAT exempt or ‘out of scope’.
A connected person is a body closely bound to a private school by financial, economic, and organisational links. They can also be connected for the purposes of section 1122 Corporation Tax Act 2010.
For VAT purposes, a private school is any school or institution that provides full time education for a fee to either:
- pupils of compulsory school age
- 16 to 19 year olds, where that institution is primarily concerned with providing education suitable to that age range
This includes:
- private schools
- independent schools
- sixth form colleges
Classes for children under compulsory school age (for example, nursery classes) will be exempt from VAT. If you’re a school that only provides these classes you will not need to register for VAT.
When you must register
Education providers will be able to register for VAT from 30 October 2024.
The exact date when you need to register for VAT will depend on:
- the value of school fee payments you receive for terms starting on or after 1 January 2025
- the date you receive the payments
Payments include registration fees paid during the application process to attend a school.
If you receive payments in advance then you may need to register before 1 January 2025, depending on when you received the payment.
If you register because you have exceeded the £90,000 VAT threshold in the previous 12 months, you must register within 30 days of the end of the month in which you exceeded the threshold. Your effective date of registration will be the first day of the second month after you went over the threshold.
If you register because you expect to exceed the VAT threshold in the next 30 days, you must register in the next 30 days. Your effective date of registration will be the date you realised you will exceed the threshold.
You should not charge VAT or produce VAT invoices until you have registered for VAT.
If you need to register for VAT and do not do so you may have to pay a late VAT registration penalty.
Payments received before 29 July 2024
How payments made before 29 July 2024 will be treated will depend on the specific terms of any agreement for the payment.
Where the payment creates a tax point for VAT purposes when the payment is made, no VAT will be due. A tax point is normally created when a service is performed or a payment is taken for a supply of goods or services.
You can find out more about tax points in:
- section 14 of VAT Notice 700
- VATTOS3000 of the VAT Time of supply HMRC internal manual
Payments received from 29 July 2024 to 29 October 2024
Any fee payments received between 29 July 2024 and 29 October 2024 for school terms starting from 1 January 2025 onwards will be subject to VAT from the later of either:
- the first date of the school term that the fees have been paid for
- 1 January 2025
You should not charge VAT or produce VAT invoices until you are registered for VAT.
Example
On 28 October 2024 you received £100,000 for private school education for the school term starting 6 January 2025.
As this is not yet considered subject to VAT, you do not need to register for VAT immediately.
These payments will become subject to VAT on 6 January 2025, when the school term starts. This means that on 8 December 2024 — 30 days before 6 January 2025 — you become aware that you will be over the £90,000 VAT threshold on 6 January 2025 and you must register for VAT.
You will have 30 days to register for VAT from 8 December 2024, as that is your effective date of registration.
You must also charge VAT on fees paid from 8 December 2024, even if you do not have your VAT registration number.
Payments received on and after 30 October 2024
Any fees received from 30 October 2024 for school terms from 1 January 2025 onwards will be subject to VAT on the date you received the payment.
You will need to notify HMRC within 30 days if you realise the amount of pre-payments you receive will exceed £90,000 in the next 30 days.
If they will not exceed £90,000, you will need to notify HMRC within 30 days of the end of the month that the total amount of pre-payments you receive — along with any other taxable supplies you might be making — exceeds £90,000.
Example
On 5 November 2024 you are aware you will receive school fee payments over £90,000 in the next 30 days, for terms starting on or after 1 January 2025.
You are liable to register for VAT and must notify HMRC by the end of that 30 day period — that is by 4 December 2024.
Your effective date of registration will be 5 November 2024, as this is the date you realised you would exceed £90,000 within the next 30 days.
You must charge VAT on fees paid from 5 November 2024, even if you do not yet have your VAT registration number.
Total payments exceeding the VAT threshold in a rolling 12-month period
If you receive pre-payments of less than £90,000 in the next 30 days you will not need to register until your total taxable supplies over a rolling 12-month period go above that amount.
Pre-payments received between 29 July 2024 and 29 October 2024 will not be subject to VAT until the later of the first day of term or 1 January 2025. You should not charge VAT or produce VAT invoices until then.
Example
It is 31 January 2025, and you realise that since the change in VAT treatment on 30 October 2024, you have received a total of £95,000 in fees for terms starting on or after 1 January 2025.
As you have exceeded the £90,000 threshold in the last 12 months, you must register for VAT with HMRC within 30 days of the end of January (the month the threshold was exceeded).
Your effective date of registration will be 1 March 2025.
This means you will need to start charging VAT from 1 March 2025.
Registering for VAT voluntarily
If you are an education provider that’s already providing services or goods that are chargeable to VAT and you are not yet required to be registered, you can register for VAT at any time.
If you are an education provider that is not providing services or goods that are chargeable to VAT now, you can register for VAT from 30 October 2024 if you provide or intend to provide private education for terms starting on or after 1 January 2025.
If you register voluntarily you’ll still need to meet VAT obligations, such as submitting VAT returns and keeping VAT records. You will also need to charge VAT on taxable goods and services you supply.
When you’ll need to charge VAT on school fees will depend on the ‘time of supply’ (or tax point). You can find out more about ‘time of supply’ in section 14 of VAT Notice 700.
How to register
Find out how to register for VAT.
When you register you should:
- enter ‘Private Education Provider’ in the ‘Business activity’ section of the online application
- use the guidance in the online application to help you select the Standard Industry Classification code that applies to you
Registering as a VAT group
If your school has more than one business entity (for example, as well as a business providing education there is another business that is a shop selling school sport equipment) it may be able to register as a VAT group.
Find out more information in:
- the registering groups, divisions and joint ventures for VAT guidance
- Group and divisional registration (VAT Notice 700/2)
After you’ve registered
You will receive a letter from HMRC confirming your VAT registration number and explaining what you must do next.
This includes:
You’ll also be able to reclaim VAT on business expenses.
Find out more information
Find out about charging and reclaiming VAT on goods and services related to private school fees.
You can also find out more about:
- filling in and submitting your VAT return in VAT Notice 700/12
- software that’s compatible with Making Tax Digital for VAT that you can use to keep VAT records and submit your VAT Returns
- paying your VAT bill
- HMRC email updates, videos and webinars for VAT
Updates to this page
Last updated 10 October 2024 + show all updates
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The 'Who must register for VAT' section of the guidance has been updated to show private schools, independent schools and sixth form colleges will need to check if they must register for VAT.
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Added translation