VAT on School Fees - FAQs

VAT on School Fees - FAQs

Possibility of the Removal of the Exemption from VAT on School Fees

As parents will know, the newly elected government have publicised their intention to impose VAT on school fees. Here, we hope to provide clarity on our position and intentions. As circumstances evolve and details unfold, our strategy may undergo adaptation, but our intention is to assure our community of the school's robust financial standing and its optimal preparedness to thrive despite the possible introduction of VAT.

Below you will find some FAQs that we hope you find helpful. Our commitment remains steadfast in addressing any concerns, especially those that may cause anxiety amongst our parent community and families considering Alleyn Court for their child's education in the coming years.

What is the government’s proposed policy on independent school fees and taxation?

It is stated by the new government that they will introduce a VAT charge of 20% on all independent school fees. For clarity, despite some of the language currently being used both by politicians and the media, this is a tax on the consumer rather than the organisation. Therefore, if implemented, it will need to be applied in full to all school fees. Any mitigation measures enacted by schools will seek to relieve the overall burden but cannot reduce or eliminate the VAT charged to parents.

In addition, it has been proposed that business rate reliefs enjoyed by independent schools, which are charities, will also be removed. This will add a direct new cost burden to independent schools.

The government have announced that these measures in England will generate over £1.6 billion in additional funds to be invested into the state education sector. Those numbers are disputed by sector representative organisations such as the Independent Schools Council

What level of certainty do we have regarding the implementation of the policy?

The government has continued to state that these taxation measures will be implemented as soon as is reasonably possible.

It is most likely that the measures will be implemented in January 2025.

Because these timing factors are entirely at the discretion of the government, and they have not provided any additional clarity on the timescale of implementation beyond stating that it will be swiftly enacted, we are focused on ensuring that we have robust planning in place for both the anticipated time frame and the potential for early implementation.

What is Alleyn Court’s position in relation to this policy?

The school has put considerable thought into this situation, in the hope that prudent and timely action will mean less uncertainty for parents and children in the coming years. Matters which have been, and are currently being considered by the Governors, include:

It may be necessary in coming years to consider some areas of cost saving. This is standard practice in independent schools as a response to economic pressures which can impact the sector from time to time. We remain committed to managing costs and planning finances carefully to ensure that the outstanding provision for pupils at Alleyn Court remains affordable to our parents.

Some other schools must carry the continuing burden of significant rises in contributions to the national Teachers’ Pension Scheme. It is the case that Alleyn Court has already dealt with this issue, and it will not be a factor in our calculations in the coming years.

Alleyn Court remains a non-profit charity and will continue to ensure that any generated surpluses are always used to support the children’s’ experiences at Alleyn Court.

What measures will be taken to avoid any negative impact on the quality of education or staff, due to these financial challenges?

Alleyn Court has always been at the forefront of educational excellence in the region, providing our pupils with an outstanding academic experience, whilst also offering unmatched extracurricular opportunities and pastoral care. We are truly proud of what our pupils achieve and what our school enables.

We believe that we have also shown ourselves in recent times to be resilient, creative and flexible in how we manage our school. We were proud with how we navigated COVID, and we hope that our response to the pandemic proves our ability to progress and improve our provision even when facing challenges. In the coming years we will similarly continue to innovate; to build and to improve the wonderful experience for every child who attends Alleyn Court School.

Why isn’t the school choosing to shield parents from some of the burden?

Simply put, the school is not in a position where it is currently able to absorb a portion of the tax burden.

The school remains a non-profit charity, led by a trustee body of volunteers.

Unlike other independent schools in the region, it does not have a large secondary school to financially strengthen it.

The school site, and assets, remain owned by private landlords to which the school remains a tenant.

The school maintains it position that the children are at the centre of all its developments.

How will the school communicate any implications of any new legislation and measures taken by the school?

We have always sought to ensure that our parents are well informed about their child’s school. We use the weekly emails to let parents know about our provision and opportunities, and this will continue to provide a means for timely communications. In addition, we have set up this page on our website, where parents can see the schools’ responses to ‘frequently asked questions’ about the impact of proposed government policies. We will write directly to our parents and prospective parents whenever external circumstances change, and at key points in the implementation of any strategic changes. By these means, we intend to keep our whole community well informed not only about the challenges being faced, but our responses.