Wilmslow Prep School won't increase fees despite VAT ruling

Instead, it will introduce a subsidy which will cancel out the 20 per cent increase that the new policy will bring for the full 2024/25 academic year.

The new Labour government says they are ending tax breaks for private schools from the start of 2025 'to better invest in state education'.

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Currently, private schools are eligible for tax breaks, like charitable business rate relief, and they don’t have to charge VAT on tuition or boarding fees.

Final details of these changes will be confirmed in the budget at the end of October.

The independent IFS (Institute for Fiscal Studies) has predicted that the tax would raise between £1.3 and £1.5 billion a year to go towards the public finances and help improve education and outcomes for young people.

The standard 20 per cent VAT rate will be added to private school fees from January 1, 2025.

It was widely believed that the imposition of VAT on private school fees would be introduced at the beginning of the 2025/26 academic year.

The announcement that VAT would be added from January 2025 caught the sector by surprise and has already resulted in a number of private schools announcing their intention to close.

The senior leadership team and board of governors at Wilmslow Prep have been working on contingency plans since the policy was first mooted.

This has included consulting with parents to seek their views.

Headteacher Bradley Lavagna-Slater said: “It has always been our intention to support our loyal parents as best we can.

Wilmslow Prep School headteacher Bradley Lavagna-Slater (Image: Supplied)

“The early imposition of VAT has left little time for parents to plan which is disappointing.

“One Cheshire school has already written to its parents to advise them that they will be adding 17 per cent to their fees from January with others adding between five per cent and 12 per cent.

“Our decision has been based on careful financial modelling and is thanks to prudent cost control and financial management over the years.

“Clearly there will be a significant financial cost to the school, but we feel that this is the best way to demonstrate our thanks and support to our parents so that the education of their children is not impacted.”

Wilmslow Prep believes that their decision will be a minority one but is determined to support families.

As well as dealing with the VAT issue, private schools say they are also losing business rates relief.

Chairman of governors Diana Stephenson said: “The Labour government has served a double whammy on private schools.

“The impact of these policy decisions is likely to put significant pressure on the state sector.

“Private schools are all about giving families choice and, like private medical provision, fill in gaps in state provision.

“There seems to be a misconception that families sending their children to schools in the private sector are super wealthy.

“That may be the case in some of the big-name schools like Eton but it is certainly not the case for a small school like ours.

“I am just delighted that we have been able to find a solution for our parents and we have had a really positive response from them.

“Moving beyond this academic year, we will continue to do whatever we can to support our loyal parent body.”

Wilmslow Prep, which celebrates its 115th birthday this year, currently has 140 pupils.

Pupils celebrated 'exceptional' results in their senior school entrance exams this year.

The class of 2024 received 28 offers for 15 children sitting the exams.