PREVIEW

Private school fees rise 22% amid VAT changes, sparking concerns over affordability and pupil numbers. Private school fees in the UK increased by 22.6% in January compared to a year earlier, according to the Independent Schools Council (ISC), with average termly fees reaching £7,382 including VAT. The introduction of 20% VAT on private school fees from January 1 has been cited as a major factor, alongside national insurance and the end of charitable business rate relief, leading to a "triple whammy" effect on costs. Despite government forecasts predicting a 10% fee increase, many schools tried to reduce fees excluding VAT to ease the burden on parents, but the ISC warns the overall impact has been underestimated. A typical middle-class family felt the impact first-hand, with one parent citing a 26% fee increase to almost £8,000 per term, forcing her to move her son with special educational needs mid-academic year. Headmaster David Morton criticized the VAT policy as "misjudged," saying it disproportionately affects low- to middle-income families and bursary students, while wealthier families remain less impacted. The government expects around 35,000 pupils to move from private to state schools long-term, but believes the impact will be small given overall student population declines forecasted in England by 2030. Research from the Institute of Fiscal Studies (IFS) supports the government's view, stating that the state sector can accommodate additional pupils, as the number of children leaving state schools exceeds those in private education. Some private schools have already reported a 4.6% drop in Year 7 pupils, but experts also link this to falling birth rates and the cost of living crisis, rather than VAT alone. A judicial review challenging the VAT policy, brought by parents and faith schools, argues the mid-year implementation was designed to maximize revenue but is causing hardship, with a ruling expected soon. The government estimates the VAT change will raise £460m this year, increasing to £1.8bn by 2029-30, earmarked for hiring 6,500 specialist teachers and improving standards in state schools, which face record-high staff vacancies.
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