1 Let’s remind ourselves how VAT affects tutoring
Before we look at the private school changes let’s remind ourselves whether tutors have to charge and account to HMRC for VAT.
In our earlier blog VAT and Tutors – 3 things you must know – Law Hound (written before the changes for private schools) we looked at the question of VAT and tutors. Basically, we saw that fees from private tuition MAY be exempt from VAT PROVIDED that the relevant criteria were met. So, tutoring fees are exempt from charging and accounting for VAT IF the fees paid are:
- “For private tuition”
AND
- “In a subject ordinarily taught in a school or university”
AND
- “The tuition is delivered by an individual teacher acting independently of an employer.”
(VAT Act 1994 Schedule 9, Group 6, item 2)
So, tutoring fees are exempt if you meet those criteria.
Overview
Here’s a quick overview of how this may affect your business:
| Sole Trader | Can they meet the criteria? | Are they potentially Exempt from VAT? |
| Private Tutor who is a Sole trader and tutors teaching a subject ordinarily taught in a school or university |
Yes |
Yes |
| Tutor operating a LTD company | No. Company is a separate legal entity. Tutor is employed by the company. Therefore, the tutor is not “acting independently of an employer.” | No unless taxable turnover is less than current VAT threshold minimum (£90,000 in 2025). |
| Tutor Agency | No. When Tutoring services are supplied via employees or subcontractors then services are not VAT exempt. | No unless taxable turnover is less than current VAT threshold minimum (£90,000 in 2025).
|
NB: If you are a Tutor Agency operating as an Employment Agency then your taxable turnover is calculated on the amount which you are paid directly because the client will pay the tutor directly!
2 What’s changed with VAT and private schools?
As of January 2025, private schools in the UK are required to charge VAT (Value Added Tax) on school fees. Essentially, this means parents or guardians paying for private education will now face an extra cost—an additional 20% on top of the already significant fees. But what does this change really mean for tutors, and should private tutors be worried about VAT rules? Let’s break it down.
The UK government explains that, in most cases, “education services and vocational training provided by private schools in the UK for a charge” will be subject to VAT at 20%. There are a couple of exceptions, though:
- Fees for students with specific, acute special educational needs (SEN) can be exempt if those needs can only be met in private schools.
- If a private school is named in a student’s Education Health Care Plan (EHCP), the Local Authority covers the VAT as part of the fees—and they’re allowed to reclaim this VAT through established processes (often called section 33 process) outlined in Local authorities and similar bodies (VAT Notice 749).
Most private school families will now have to shoulder the burden of the VAT increase themselves.
3 What About Tutors—Are They Affected with the changes with VAT and private schools?
You might be wondering, “Does this mean private tutors will now have to charge VAT, too?”
HMRC have issued guidance Charging and reclaiming VAT on goods and services related to private school fees – GOV.UK. Crucially, they refer to these changes only apply to private school fees. While some exemptions are mentioned, private tutoring is not specifically mentioned. That means digging a little deeper!
It seems that it is NOT the government’s intention to remove or change the current exemption which relates to VAT for tutors. As a private tutor, if you still meet the criteria then paragraph/section 2.17 of HM Treasury’s “Applying VAT to Private School Fees and Removing the Business Rates Charitable Rates Relief for Private Schools” is likely to apply. Paragraph/section 2.17 states that the changes mean that “The treatment of education supplied by private tutors (which is exempt from VAT if the tutoring is of a subject ordinarily taught in schools) will also not change as a result of this policy.”
The impact for tutors:
So the good news is that nothing is changing for private tutoring in the UK. The changes are intended to only impact on private schools. So, if you are a private tutor who is a sole trader and tutors in a subject ordinarily taught in a school or university you are still VAT exempt.
If you’re a tutor agency or a tutor operating through a limited company then the same rules apply. Once your taxable turnover reaches the current VAT threshold (£90,000 in 2025) you must
- Register for VAT
- Charge VAT
- Account to HMRC by providing VAT returns on a quarterly basis.
A Word of Caution
That said, the law, including VAT and tax regulations are rarely straightforward. The 2020 case of Simply Learning Tutor Agency Limited highlighted how tricky the rules can get, especially for tutoring businesses and agencies. If you’re uncertain about whether you need to register for VAT, or if you’re struggling to understand how these changes could impact your specific situation, it’s a smart idea to seek professional advice. Doing so can save you from fines, confusion, and potential damage to your reputation.
Need Help?
Running a business can be overwhelming, especially when you’re trying to focus on growing your tutoring business. That’s where we come in! If you need legal and business support for your tutor business, we’re here to help.
- Sign up for free information: Get regular updates and practical advice.
- Book a fixed price Business Clarity Call: Looking for in-depth guidance? Our lawyer with a business-savvy approach can help you build a strong foundation and steer your business in the right direction.
Running a tutor business comes with its challenges, but with the right advice and support, you can navigate these changes with confidence!