Stay ahead of the VAT changes in January 2025

Preparing for the VAT and rate relief changes: smart strategies for private schools

Following the Budget announcement, Chancellor Rachel Reeves confirmed private schools would no longer be exempt from VAT in the autumn Budget, saying the money raised would help “provide the highest quality of support and teaching” in the state sector. This change, taking effect from January 2025, will mean 20% VAT will apply to education and boarding fees, and from April 2025, the removal of charitable business rate relief will add further financial pressure.

The Independent Schools Council (ISC), the body which includes most independent schools in the UK, voted to pave the way for legal action. Lord David Pannick KC, one of the country’s leading barristers in cases relating to government decisions, will be leading the challenge on behalf of parents, including those with children with special educational needs and disabilities (Send). The action will be brought around Article 14, the prohibition of discrimination, and Article 2 of the First Protocol, the right to education.

If this legal action is successful or not, staying ahead of these changes and being proactive can help to alleviate some of the financial impact. One of the smartest moves is to make any essential purchases before the changes come into effect.
Here, we discuss 3 possible ways to be proactive and stay ahead of the VAT rises:

1. Assess your immediate and long-term needs
The VAT changes will inevitably impact your school’s operational costs. Take this opportunity to perform a thorough audit of your school’s current resources and any upcoming needs. Identify where investments can make a substantial difference over the long term, such as furniture, classroom technology, and facility upgrades. For example, does your school need to upgrade seating arrangements, create agile learning spaces, or enhance dormitory amenities? Knowing this will help you prioritise purchases that align with your budget.

2. Invest in high-quality furniture and durable assets
One area where private schools can see a strong return on investment is in furniture and equipment that can withstand years of daily use. This is particularly relevant for high-traffic areas like classrooms, libraries, common spaces, and dormitories. By investing in durable, premium furniture now will increase the longevity of your FF&E saving you money in the long term.

Edushift, partners with Europe’s largest education furniture provider VS Vereinigte Spezialmöbelfabriken GmbH & Co to offer quality furniture solutions that cater to the unique requirements of modern educational environments, including agile, adaptable designs that support interactive learning.

3. Explore funding opportunities
Exploring grant programs or educational funds that provide support for infrastructure upgrades may help off-set the VAT increase implications. The VAT and rate relief changes may increase the number of grants or government funding options in education, as many institutions seek assistance to absorb the increased costs. In addition, check if there are local initiatives that might offer subsidised options for the educational sector, especially for large purchases.

A final thought: plan now to stay ahead
The upcoming VAT and rate relief changes will create significant budgetary adjustments, but strategic planning and wise purchasing now can help mitigate some of the impact. By acting before January, private schools can secure high-quality assets that will continue to serve students and staff for years, while optimising resources in a time of financial transition.

Our team at Edushift is here to support your school’s unique needs during this period of change. Contact us to learn more about our range of premium educational furniture designed to promote agile, flexible learning spaces—helping you invest wisely before the new costs come into play.