European embassies in London are actively advocating for the UK government to exempt international schools from the forthcoming 20% Value Added Tax (VAT) on private education. This new VAT charge, which will eliminate the current exemption on private school fees, is set to take effect in January 2025. This impending tax change has prompted concern from several European nations that financially support international schools in the UK, as they argue that British independent schools overseas are not subject to similar taxation. Diplomats worry that this VAT policy could render tuition fees unaffordable for many expatriate employees, potentially straining diplomatic relations.
The UK government anticipates that this move could generate up to £1.5 billion, earmarked for investment in state schools, including funding for the recruitment of 6,500 teachers. A representative mentioned to the Financial Times that the Spanish embassy participated in a recent public consultation regarding the proposals and specifically requested an exemption for the Instituto Español Vicente Cañada Blanch (IEVCB) in London. The IEVCB, while registered as an independent school in the UK, is operated by the Kingdom of Spain for “non-commercial governmental purposes in the exercise of public functions, as is public education.” The institution functions as a not-for-profit public school, offering free education to Spanish nationals living in the UK and significantly discounted fees for British and other students.
There has yet to be a decision from the Spanish embassy on whether to impose fees on its Spanish pupils from January, although it currently charges around £7,000 annually for non-Spanish students. The ambassador underscored the issue of “reciprocity,” pointing out that British schools in Spain enjoy VAT exemption, a contrast to the proposed charges for international institutions in the UK. Meanwhile, numerous private schools across the UK have informed parents that they will need to pass the full 20% tax cost onto them, although some schools have indicated they might absorb part of the cost due to operational efficiencies.
Among those affected are the 11 French schools in the UK, which receive oversight and partial funding from the French government. For instance, the Lycée Français Charles de Gaulle in west London currently charges annual fees of up to £16,923, which could potentially increase to over £20,000 following the VAT rise. These French institutions adhere to the national curriculum and prepare students for French national examinations. The French Embassy has expressed that while it does not wish to interfere with the legislative process, it has communicated its concerns regarding the VAT’s potential negative impact on these schools. They emphasized that the French government’s intent is to facilitate the integration of these institutions into the French educational system while ensuring they remain financially accessible for families based abroad. They remarked, “These are not typical private schools,” and hope that the UK government will consider their unique nature in implementing this reform.
Similarly, officials from the German Embassy have confirmed their engagement with the UK government on this matter. The German school located in Richmond, London, receives partial funding from the German government, as do other German schools internationally. A spokesperson for the UK government stated, “We want to ensure all children have the best chance in life to succeed. Ending tax breaks on private schools will help raise the revenue needed to fund our education priorities for the upcoming year, such as recruiting 6,500 new teachers.”
