VAT impact: 11,000 fewer pupils at independent schools, ICS says

The Independent School Council’s (ISC) annual census has revealed that there are 545,640 pupils at its 1,423 member schools, a reduction of nearly 11,000 or 2% compared with 2024, which it says highlights the impact of the 20% VAT charge on private education that came into force in January 2025.

The non-profit lobby group for private schools in the UK said the headline figure comes despite a net increase of 12 in the number of schools within its membership.

Breaking this down by year group, three of the main intake years for independent schools – Reception, Year 3, and Year 7 – recorded decreases of over 5%.

Primary schools also saw the biggest impact with pupil rolls down 3.5% between January 2024 and January 2025, while secondary school numbers fell 1.7%.

It also found that 584 schools or 67.7% reduced their underlying day fees in January 2025 to prevent passing the full 20% VAT to parents. Overall it said that by focusing on fee changes made between September 2024 (before VAT was added) and January 2025 (when VAT was first applied), the average fee reduction was 5.0%, meaning “that on average, schools passed on in effect 14.0% VAT to parents”.

The report also highlighted that many of its members have increased the help they give pupils with their fees. It found a total of 183,487 pupils currently receive help with their fees, representing 34.5% of all pupils to a value total of over £1.5bn, an increase of 11.4% compared with last year.

A significant majority (73%) of total fee assistance is provided directly from the schools themselves: ISC schools currently provide fee assistance worth over £1.1bn annually, an increase of 3.9% on the previous year.

In the foreword to the report, ISC interim chairman Mark Taylor, said: “Leaders have had to reckon with a triple whammy on their finances: VAT levied on fees, yes, but also the loss of charitable business rates relief and the rise in National Insurance employer contributions. For those schools still in the Teachers’ Pension Scheme, last year’s rise in employer contributions added a fourth whammy.

“This series of political decisions is unprecedented. Experts differ on what impact it will have on independent schools and on the wider education system, so it is vital that we have statistics to demonstrate in black and white the repercussions of these policies. With solid data, we can hold politicians to account and help schools plan for the years to come.”