UK private school exodus expected on higher VAT, but experts say Hong Kong families unfazed
- Consultants add the VAT roll-out is likely to be charged in phases and schools may not pass on all the tax burden to parents
The UK government has said about 40,000 students may quit private schools if a proposed value-added tax (VAT) of 20 per cent is levied on their school fees, but Hong Kong education consultants expect the extra cost will not affect demand from parents in the city who prefer British private institutions.
The consultants added the VAT roll-out was likely to be charged in phases, while the schools might not pass on all the tax burden to parents.
The independent school sector in the UK admitted more than 62,000 overseas students in 2024, and pupils from mainland China and Hong Kong comprise the largest groups with 5,824 and 5,075 pupils, respectively, according to the annual census conducted by the country’s Independent Schools Council.
British finance minister Rachel Reeves on Monday revealed a proposal to introduce 20 per cent VAT on private school fees from next January 1. VAT will also apply to prepayment of fees, an arrangement some private schools may have offered parents in hope of avoiding the tax.
A consultation on the proposal will run for seven weeks until September 15, during which the UK government will consider stakeholders’ feedback.
A government document published after Reeves’ speech revealed that UK authorities expected the new 20 per cent tax would drive away some private school parents.
