This research by Premium Credit claims that 91% of headteachers, bursars and finance managers at fee-paying private schools in the UK believe that 10% or more of their pupils would be at risk of leaving their school if VAT is applied to fees because their parents would not be able to afford to pay them.
According to the research, many private schools would look to cover some of the increase in fees resulting from VAT being applied to them. Only one in ten (10%) of the headteachers, bursars and finance managers interviewed said their schools would pass on the full 20% increase. Some 52% of those interviewed said they would pass on 50% or less of the VAT increase.
However, the study says that in not passing on the full VAT increase to parents in higher fees and taking some of the financial hit from this themselves, many schools would look to make cutbacks as a result.
Two thirds of private school headteachers, bursars and finance managers interviewed said they would look to reduce headcount at their school and use the money saved to reduce the impact of VAT on school fees, and one in two (50%) said they would invest less in the infrastructure of the school.
Key Findings:
- Some 52% of those interviewed said they would pass on 50% or less of the VAT increase.
- Two thirds of respondents said they would look to reduce headcount at their school to reduce the impact of VAT on school fees.
- 91% of headteachers, bursars, and finance managers believe that 10% or more of their students could leave if VAT is applied to school fees. 35% estimate that 15% to 30% of students could be at risk of leaving due to unaffordable fees.
- Only 10% of schools would pass on the full 20% VAT increase to parents. Instead, 52% would pass on 50% or less of the increase.
- Many schools would absorb part of the VAT increase themselves, leading to cutbacks.
- 50% would invest less in school infrastructure.
- There is an expectation that more parents will use schemes like the School Fee Plan (SFP) to spread the cost of school fees over 12 months.
- School fees are already high, averaging £16,374 annually for day school children and £39,000 for boarders.