Overview

• HMRC plans detailed examinations of advance-fee arrangements after Britain’s top private schools collected £515 million last year before the January VAT kick-in
• Analysis shows prepaid fees at the 50 most expensive schools jumped from £121 million in 2023 to £515 million in 2024, raising doubts over official revenue forecasts
• Labour projects the 20% levy will generate £1.6 billion annually to fund 6,500 new state school teachers, but advance payments and possible clawbacks could disrupt those plans
• Since January’s VAT introduction, at least 54 independent schools have closed or announced closures, surpassing the sector’s normal annual average
• Independent school enrolment in England dropped 1.9% to 582,477 pupils in January 2025, marking the first decline since the Covid-19 pandemic