Edinburgh private school George Heriot's plans three-year fees freeze to ease impact of VAT

VAT at the standard rate of 20 per cent will be added to private school fees from January 1, 2025 in a move which the sector claims will put extra financial pressure on parents and lead to many pupils moving to state schools.

George Heriot's School in Edinburgh | George Heriot's School

In a statement to the Evening News’ sister paper The Scotsman, George Heriot's School said it would be aiming for a three-year freeze to provide "stability" for parents, followed by inflation-only increases from August 2028. And the school has also established a short-term transition fund to provide support for families struggling with added costs.

The move comes despite the 400-year-old school revealing it faces a bill of around £350,000 per year due to the increase in employers’ National Insurance contributions announced in the UK budget in October.

Meanwhile, other private schools have announced fee rises, though some have sought to ease the VAT burden and absorb some or all of the costs by effectively reducing their prices before VAT is added.

Edinburgh Academy fees are to rise by 18 per cent. Parents of pupils at the Mary Erskine School and Stewart's Melville College face having to pay 16.2 per cent extra from January

Fettes College is set to increase fees by 7 per cent and a 15 per cent increase is planned at both George Watson's College and St George's.

In the statement from George Heriot's, principal Gareth Warren and chair Joyce Cullen said: "The governors and the principal of George Heriot's School have deep concerns about the likely impact of the UK government's decision to impose VAT on school fees from January 2025 which, taken along with the increase in employer's National Insurance contributions from April 2025 will inevitably result in a substantial increase in the cost of an independent education, which many Heriot's families will find challenging.

"We believe that this policy will exacerbate social inequality as an unintended consequence."

They added: "In response to the imposition of VAT, a short-term transition fund has been established by the school to provide VAT bursarial support over the next 18 months until the end of 2026.

"This will enable Heriot's to provide educational continuity for those current families who will find it particularly difficult to meet the immediate additional burden of the tax placed on their child's education.

"In addition, to give parents future certainty, George Heriot's will seek to maintain fees at their current level for three years; sessions 2025-26, 2026-27 and 2027-28.

"It is hoped that this three-year fee freeze will provide parents with cost stability and allow families to plan their finances.

"From August 2028, it is expected fees will increase annually, in line with inflation. This strategy is naturally dependent on the school roll remaining stable, and there being no further significant external factors impacting its business model."