UK HMRC Issues VAT Registration Guidance Following Removal of Exemption for Private School and Boarding Fees

VAT Exemption Removal: The UK is removing the VAT exemption for private school and boarding fees from 1 January 2025. Fees for school terms starting on or after this date will be taxable at the standard VAT rate of 20%.
Registration Guidance: HMRC has published guidance for education providers on checking if and when they need to register for VAT, considering the changes effective from 30 October 2024.
Registration Criteria: Private schools or connected persons must register for VAT if their taxable turnover exceeds £90,000 in the last 12 months or is expected to exceed this threshold in the next 30 days.
Definition and Exemptions: For VAT purposes, a private school includes institutions providing full-time education for a fee to pupils of compulsory school age and 16 to 19-year-olds. Nursery classes and schools only offering education to children under compulsory school age remain VAT-exempt.
Registration Timeline: Education providers can register for VAT from 30 October 2024. Registration must occur within 30 days of exceeding the VAT threshold or anticipating to exceed it within 30 days. Providers should not charge VAT or issue VAT invoices until they are officially registered to avoid penalties.