The number of private schools collapsing into administration has doubled in the first half of this year, as the government’s VAT changes bite into the sector’s finances.
Figures released by risk advisory firm Kroll show that 12 private schools went into administration between January and July, compared with six during the same period last year. Four of those failures occurred in July alone, raising fears that closures could accelerate further.
Kroll warned that administrations across the education sector could end the year almost 50 per cent higher than in 2024. Experts attribute the sharp increase to Labour’s decision to apply VAT at 20 per cent to private school fees from January and to abolish the sector’s charitable status in April, which removed business rate relief.
Benjamin Wiles, managing director at Kroll, said: “While there continues to be economic uncertainty, weak business confidence and unwelcome speculation on further taxes, we are not seeing a surge in company insolvencies. Naturally, what is more interesting is the picture within certain sectors. We saw a jump in administrations among education and schools, most likely as a result of the government’s VAT increase that took effect at the beginning of the year.”
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