The introduction of VAT on school fees has dominated headlines and understandably so. For many families, it represents a significant additional cost and for independent schools, it’s created fresh uncertainty about future enrolment and affordability. Yet, from our position, VAT is just one part of a much more complex financial picture.
Working with schools across the country, we see challenges emerging that receive far less attention but can be just as damaging if left unchecked.
One of these being a rise in defaults among international families. Overseas pupils bring valuable diversity and income to schools and their cultural perspectives broaden the experience for all students. Unfortunately, their financial arrangements can sometimes prove less stable than expected. We’ve supported schools where parents returned abroad mid-year, leaving unpaid balances behind or where exchange rate fluctuations made agreed fees more difficult to meet. These aren’t isolated incidents and they highlight the importance of structured agreements and early intervention when payments slip.
Another area where we see growing tension is around deposits. Disputes arise when families withdraw children earlier than planned or when notice periods are not clearly understood. In several recent cases, parents challenged their liability for fees after withdrawal, leaving schools caught between contractual terms and preserving relationships. Where terms were set out clearly and applied consistently, schools were in a far stronger position to resolve matters fairly and quickly.
Mid-term withdrawals are also becoming more common. For some families, financial pressures have resulted in moving children to a different school or into the state sector partway during the academic year. This can leave schools facing sudden gaps in both classroom numbers and expected income. We’ve seen how disruptive this can be, particularly for smaller schools where every pupil makes a tangible difference to financial planning.
What links all of these risks is how they tend to build quietly in the background. Unlike the introduction of VAT, they rarely attract headlines or sector-wide debate. However, their cumulative impact can be just as significant.
From our perspective, fee resilience isn’t about responding to a single policy change but about preparing for a broad spectrum of risks. Recognising the less obvious pressures and addressing them early gives schools the best chance of protecting both their financial stability and their ability to provide continuity of education.
Redwood Collections works alongside independent schools nationwide to safeguard fee income with a professional and sensitive approach. For a confidential discussion about strengthening your school’s financial resilience, call us on 020 4532 8075 or email keyaccounts@redwoodcollections.com.
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