The Treasury advises that the VAT exemption for private school fees and boarding school fees will be removed with effect from 1 January 2025.
The UK Chancellor announced on the 29 July 2024 that with effect from 1 January 2025 all educational services and vocational training being supplied by private schools would no longer be exempt from VAT and instead will be subject to the standard rate of 20%.
Additionally, any fees invoiced or paid in advance relating to terms after 1 January 2025 will also be subject to the standard rate of VAT.
These changes may require private schools who are not currently VAT registered to make an application to register. However, this is not required immediately following this announcement. Further detailed guidance on how and when to register for VAT will be published in due course.
Draft legislation is currently in progress as, under the terms of the Customs and Excise Agreement 1979, we are required to keep the rules and procedures in relation to customs and excise duties in line with those in place in the United Kingdom.
HMRC released the following policy paper brief on 29 July 2024.
Further detailed guidance and legislative updates will be published and provided in due course.
For general enquiries please email customs@gov.im or call +44 1624 648130 (Monday to Friday 8:30am to 4:30pm).
