Check if you must register for VAT if you receive private school fees

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Education providers that charge school and boarding fees must check if they need to register for VAT because of these changes.

Who must register for VAT

You must register for VAT if you’re a private school or connected person that supplies education services or vocational training or provide boarding services closely related to educational or vocational training and either:

• your total taxable turnover for the last 12 months is over £90,000
• you expect to receive payments over £90,000 in the next 30 day period

Taxable turnover is the total value of everything you sell that is not VAT exemptVAT exempt or ‘out of scope’.

The test for whether a person is a connected person is set out at section 1122 Corporation Tax Act 2010. An eligible body may also be treated as connected where the private school and the eligible body have put in place arrangements mainly to benefit from VAT exemption on supplies that should be taxable. You can find out more about eligible bodies for VAT in section 4 of Education and vocational training (VAT(VAT Notice 701/30).

For VAT purposes, a private school is any school or institution that provides full time education for a fee to either:

• pupils of compulsory school age
• 16 to 19 year olds, where that institution is wholly or mainly concerned with providing education suitable to that age range

This includes:

• private schools
• independent schools
• private sixth form colleges

Nursery classes provided by private schools consisting wholly, or almost wholly, of children under compulsory school age will be exempt from VAT.VAT. For example, a nursery class consisting of 90% or more children under compulsory school age will be exempt from VAT.VAT. If you’re a school that only provides nursery education you will not need to register for VAT.VAT.

When you must register

The exact date when you need to register for VAT will depend on:

• the value of school fee payments you receive for terms starting on or after 1 January 2025
• the date you receive the payments

Payments include registration fees paid during the application process to attend a school.

If you receiverun paymentsa inprivate advanceschool, find thenout if you may need to register beforefor 1 January 2025, depending on when you received the payment.VAT.

If you register because you have exceeded the £90,000 VAT threshold in the previous 12 months, you must register within 30 days of the end of the month in which you exceeded the threshold. Your effective date of registration will be the first day of the second month after you went over the threshold.

If you register because you expect to receive payments exceeding £90,000 in the next 30 day period, you must register in the next 30 days. Your effective date of registration will be the date you realised you will exceed the threshold.

You should not charge VAT or produce VAT invoices until you have registered for VAT.VAT.

You can use this tool to check when you need to register for VAT for private school fees. It is for guidance only.

Check now

Payments received before 29 July 2024

How payments made before 29 July 2024 will be treated will depend on the specific terms of any agreement for the payment.

Where the payment creates a tax point for VAT purposes when the payment is made, no VAT will be due. A tax point is normally created when a service is performed or a payment is taken for a supply of goods or services.

You can find out more about tax points in:

• section 14 of VAT Notice 700
• VATTOS3000 of the VAT Time of supply HMRC internal manual

Payments received from 29 July 2024 to 29 October 2024

Any fee payments received between 29 July 2024 and 29 October 2024 for school terms starting from 1 January 2025 onwards will be subject to VAT from the later of either:

• the first date of the school term that the fees have been paid for
• 1 January 2025

You should not charge VAT or produce VAT invoices until you are registered for VAT.VAT.

You cannot include VAT on your invoices until you get your VAT registration number but you can increase your prices to account for the VAT you’ll need to pay to HMRC.

Example

Payments to non-maintained special schools

Payments received by non-maintained special schools between 29 July 2024 and 29 October 2024 will be treated differently and will depend on the specific terms of any agreement for the payment.

Where the payment creates a tax point for VAT purposes when the payment is made, no VAT will be due. A tax point is normally created when a service is performed or a payment is taken for a supply of goods or services.

You can find out more about tax points in:

• section 14 of VAT Notice 700
• VATTOS3000 of of the VAT Time of supply HMRC internal manual

Payments received on and after 30 October 2024

Any fees received from 30 October 2024 for school terms from 1 January 2025 onwards will be subject to VAT on the date you received the payment.

You will need to notify HMRC within 30 days if you realise the amount of payments you receive will exceed £90,000 in the next 30 days.

If they will not exceed £90,000, you will need to notify HMRC within 30 days of the end of the month that the total amount of payments you receive — along with any other taxable supplies you might be making — exceeds £90,000.

When calculating your taxable turnover from your past 12 months: 

• only include school fees relating to school terms starting on or after 1 January 2025 
• include fees from 30 October 2024 when they are received 
• include fees received between 29 July 2024 and 29 October 2024 from the later of either 1 January 2025 or the start date of that term

You cannot include VAT on your invoices until you get your VAT registration number but you can increase your prices to account for the VAT you’ll need to pay to HMRC.

Example

Total payments exceeding the VAT threshold in a rolling 12-month period

If you receive payments of less than £90,000 in the next 30 days you will not need to register until your total taxable supplies over a rolling 12-month period go above that amount.

Payments received between 29 July 2024 and 29 October 2024 will not be subject to VAT until the later of the first day of term or 1 January 2025. You should not charge VAT or produce VAT invoices until then.

Example

Registering for VAT voluntarily

If you are an education provider that’s already providing services or goods that are chargeable to VAT and you are not yet required to be registered, you can register for VAT at any time.

If you are an education provider that is not providing services or goods that are chargeable to VAT now, you can register for VAT from 30 October 2024 if you provide or intend to provide private education for terms starting on or after 1 January 2025.

If you register voluntarily you’ll still need to meet VAT obligations, such as submitting VAT returns and keeping VAT records. You will also need to charge VAT on taxable goods and services you supply.

When you’ll need to charge VAT on school fees will depend on the ‘time of supply’ (or tax point). You can find out more about ‘time of supply’ in section 14 of VAT Notice 700.

How to register

Find out how to register for VAT.

When you register you should:

• enter ‘Private Education Provider’ in the ‘Business activity’ section of the online application
• use the guidance in the online application to help you select the Standard Industry Classification code that applies to you

How to choose your business entity

To register, you will need to know what type of business entity applies to your school.

A charitable incorporated organisation is an incorporated structure designed for charities registered with the Charity Commission.

A limited company is a company ‘limited by shares’ or ‘limited by guarantee’.

Registering as a charitable incorporated organisation

If you are registering as a charitable incorporated organisation and your Company Registration Number begins with the prefix CE or CS, when you register you should:

• select ‘Other’ when asked what type of business you are registering
• select ‘Unincorporated Association or Other Relevant Charity’ when you are asked what specific type of entity you are
• leave the box blank when asked to enter a Unique Taxpayer Reference (UTR) or HMRC reference

If your school is a charitable incorporated organisation and has a Company Registration Number that does not begin with the prefix CE or CS, you’ll be able to register with your Company Registration Number. If you’re not sure what your registration number is, you can search the register.

If you are not registered as a Charitable Incorporated Organisation, there is more information available on setting up a charity and the different structures you can choose.

Registering as a UK limited company

If your school is a UK limited company and not a charitable incorporated organisation, you’ll need your Corporation Tax UTR in addition to your Company Registration Number. The reference will be on tax returns and other correspondence that HMRC has sent you.

If you do not know what your UTR is, you can ask for a copy of your Corporation Tax UTR if you have a Company Registration Number.  If you do not have a Company Registration Number, you’ll need to register with Companies House and HMRC will send you your Corporation Tax UTR within 15 working days.

Registering as a VAT group

If your school has more than one business entity (for example, as well as a business providing education there is another business that is a shop selling school sport equipment) it may be able to register as a VAT group. 

Find out more information in: 

• the registering groups, divisions and joint ventures for VAT guidance 
• Group and divisional registration (VAT(VAT Notice 700/2)

Adding directors and director’s association details

You do not need to add information about your school governors and bursars to this section of the online application.

After you’ve registered

You will receive a letter from HMRC confirming your VAT registration number and explaining what you must do next.

This includes:

• keeping VAT records
• sending a VAT Return
• paying your VAT bill

You’ll also be able to reclaim VAT on business expenses.

Get more information

You can also find out more about:

• charging and reclaiming VAT on goods and services related to private school fees
• filling in and submitting your VAT return in VAT Notice 700/12
• software that’s compatible with Making Tax Digital for VAT that you can use to keep VAT records and submit your VAT Returns
• paying your VAT bill
• HMRC email updates, videos and webinars for VAT