The number of students at private schools has dropped by 2.45% from 551,578 at the beginning of the academic year, to 538,215 in January, revealed the latest figures from the Independent Schools Council (ISC).

When the tax charge was first announced last July, the government predicted the addition of VAT on school fees would only reduce the pupil numbers by 3,000 when in fact it is down more than fourfold by over 13,500 pupils.

Julie Robinson, chief executive of the ISC, said: ‘Our data shows a significant decrease in pupil numbers. It is going to take a few years until we see the full impact of this, but [we believe] it’s worse than the government predicted.

‘Anyone who’s interested in the government’s VAT policy as a revenue raiser should be seriously concerned by these numbers. It risks raising absolutely nothing [in revenue] and yet the damage it is doing in terms of disrupting the education of children is already clear.’

The number of new pupils has also been falling over recent years. Since 2023-24 pupil numbers have fallen by 2,939 (2.7%). There were 107,259 new pupils enrolled in the current academic year, although this only covers the schools that were members of the ISC in all the relevant years.

The average increase in fees last year was 8%, which was ‘similar to government figures of inflation at the time schools made fee decisions for the coming year’, said the ISC. Most schools were charging between £3,000 and £6,000 per term, just 60 schools charge less than £2,000 per term.

Private school fees this year have now increased by 22.6% in January 2025 compared to the same month the year prior, effectively the majority of schools have recharged the VAT at 20% with a 2.6% rise below January’s 3% inflation.

The average day school fee has increased from £6,021 on average in January 2024, to £7,382 in January 2025, but is not just due to VAT but also because of a number of years of high inflation according to the government.

Robinson claimed the sector had been hit by a ‘triple whammy’ between the NI rises, VAT being applied to fees and the end to charitable business rates relief.

‘It seems clear to us that the government has underestimated the effect,’ Robinson said. ‘We know parents have already left the sector because of the threat of VAT coming in so we do expect the reality of this to lead to further decreases but the full effects will only become apparent over the next few years.’

The ISC, private schools, as well as HMRC and Rachel Reeves are all awaiting the outcome of the High Court case which took place in April to see if the VAT being added to private school fees is a breach of student’s human rights.

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