When the Chancellor confirmed, in the summer of 2024, that 20% VAT would be added to independent school fees from 1 January 2025, the sector produced two sets of numbers. The Independent Schools Council warned of tens of thousands of displaced pupils and waves of closures. The Treasury costed the measure at roughly £1.5bn in 2025/26, rising to £1.8bn a year by the end of the decade, and projected that about 37,000 pupils — roughly 6% of the private cohort — would migrate to the state sector over time. [HM Treasury / gov.uk]
A year and a term in, both estimates look too neat.
What actually happened to fees
The Good Schools Guide's autumn 2025 survey of London independents put the combined effect of VAT plus the usual annual rise at somewhere between 12 and 20 per cent on the January 2025 invoice, depending on how each school chose to absorb the change. Very few absorbed it in full. St Paul's School listed day fees of £11,949 per term for 2025–26; Westminster's sixth-form figure reached £49,950 for the year, inclusive of VAT. Highgate and City of London, both historically in the middle of the London fee range, pushed through a further rise of roughly three per cent for the 2025–26 year on top of the January step-change — closer to inflation, but landing on a base that was already materially higher. [Good Schools Guide, "Private school fees 2026"; Westminster School; St Paul's School]
"First invoice of the year was 16 per cent up. Second term was fine. But the compounding is the thing. Year 7 to Year 13 looks different now." — composite, drawn from several Mumsnet threads on the Secondary board, spring 2025
What happened to pupil numbers
The 2025 ISC Census, published in May 2025, recorded a fall of 13,363 pupils across member schools — 2.4 per cent — described by the organisation itself as the largest year-on-year drop since data collection began in 2011. [ISC Census 2025; Tes, "Biggest fall in independent school pupils"]
That is well short of the Treasury's projected 37,000. Three things explain the gap. First, the migration is phased: families with children already at Year 9 or above are unlikely to move mid-programme, and many who were considering entry deferred rather than cancelled. Second, the London day market — the focus of Houseroom's tracking — held up better than the national figure. Third, the closures headline moved more slowly than expected. The education press counted somewhere above thirty independent schools announcing closure during 2025, but almost all were small, rural, or specialist — not the 'middle market' London day schools many had feared.
The quieter reshaping
The more interesting movement is in the middle. Several London senior schools have, quietly, increased their bursary allocations in 2025–26 — responding both to the political moment and to applications from families newly at the threshold of affordability. ISC census data shows total sector fee assistance reaching £1.5bn for the first time, up 11.5 per cent year on year, with the average means-tested bursary now worth £13,852. [ISC Census 2025]
Schools have, in parallel, leaned harder on two things: overseas boarders (whose families pay VAT as a cost of doing business and generally keep coming), and what a number of London bursars now call "fee-rated" sibling discounts — i.e. quiet negotiation at the registrar level where two or three children are in the system and one is close to leaving. These arrangements rarely appear in print.
"We asked the question. The registrar took it seriously. We got something modest in writing by October half-term. It is not a bursary. It is not a scholarship. It is a conversation." — composite, drawn from Mumsnet threads, autumn 2025
What it means for families now
For a family considering entry in September 2026 or September 2027, three practical conclusions follow from the data.
First, the January 2025 step is banked — any further rise at your target school is now on a VAT-inclusive base. Model the full run on the 2025–26 figure plus three to five per cent per annum. On the top London day schools, that is the difference between "tight" and "unsustainable" for a sizeable number of households.
Second, the bursary conversation has opened up. Eton continues to report that around 20 per cent of its pupils are on means-tested support, with awards from 5 to 100 per cent of fees. [Eton College, Financial Aid] Several London day schools have followed, in fact if not in press release, with higher upper thresholds for partial awards.
Third, the quieter closures are happening not among the schools a London family would be choosing between, but at the edges of the sector — small pre-preps in commuter towns, specialist music and SEN settings. These are the settings whose loss most worries the charity-commission filings; they are also the ones the VAT policy was least designed to catch.
The headline — "fewer closures, sharper rises, a reshaping middle" — is not the one anyone expected in July 2024. It is, however, the one the data now supports.
Sources: HM Treasury VAT guidance (gov.uk); ISC Census 2025; Good Schools Guide; Westminster School and St Paul's School fee schedules; Eton College Financial Aid.
Editor's note: Mumsnet quotes in this piece are composite, drawn from several public Secondary-board threads. Fee figures are taken from schools' own 2025–26 published schedules.