Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how private schools who were not previously VAT-registered but did produce taxable supplies that were under the registration threshold will be treated under the new VAT guidance.

A private school, or any other business, making taxable supplies under the threshold has no requirement to register for VAT. Once the value of taxable supplies made exceeds the VAT registration threshold, which currently stands at £90,000, they must register for VAT.

On 1 January 2025 supplies of education by private schools become subject to VAT at the standard rate of 20%. These fees must be included with the value of all other taxable supplies in calculating taxable turnover.

If the taxable turnover of a private school now exceeds the threshold, either due to supplies of education alone or a mix of education with other taxable supplies, they must register for VAT. This requirement extends to any person over the threshold and to taxable supplies of any nature.

The change in legislation and new guidance applies only to supplies of education by a private school and does not affect other taxable supplies.