Parents of children at the UK's leading private schools may be avoiding the government's controversial VAT policy by paying fees up front. Britain's most expensive independent schools received £515 million in advance fees in 2024, up from £121 million the previous year, according to analysis of annual accounts by The Telegraph.
The richest parents could have avoided as much as £103 million in tax, with some paying for five years in advance. Experts warn the scale of prepayments could hit the government's revenue plans. Dan Neidle of Tax Policy Associates described the level as 'extremely high'.
Brighton College received £50.1 million in prepaid fees last year, up from £4.1 million, with 819 pupils on the scheme versus 86 in 2023. Eton College saw prepaid fees rise from £16.6 million to £52.7 million over the same period.
The Treasury said the Office for Budget Responsibility factored prepayment schemes into its forecasts. A government spokesperson added that fees paid in advance may still be liable for VAT depending on scheme structure, and HMRC will scrutinise them to ensure correct tax is paid.
Labour insists the policy aims to raise £1.8 billion per year for state schools by 2029-30. However, critics argue smaller independent schools will be hit hardest, with over 50 already closed or announcing closure since the VAT imposition.
