Most independent preparatory schools operating without affiliation to senior schools or larger educational groups are at risk of closure within the next five years, according to Dan Harrison, executive head of Sedbergh School in Cumbria. Harrison attributed this projected decline primarily to the financial strain caused by the introduction of a 20 percent value-added tax (VAT) on private school fees, implemented by the Labour government in January 2025.

Harrison described the situation for standalone prep schools as “Darwinian,” with many likely to disappear through closures or mergers. He warned that unless a prep school currently has a significant waiting list, it should consider its strategic options carefully to withstand the mounting pressures. He noted that the combined impact of the VAT increase, rising business rates, inflationary wage adjustments, energy costs, and the expense of maintaining aging buildings are collectively overwhelming many institutions.

Since the VAT exemption removal on school fees, more than 115 private schools have reportedly closed, according to the Independent Schools Council. Prep schools are particularly vulnerable due to typically smaller enrolments and the tendency for some parents facing financial constraints to delay private education until the secondary level. Statistics from the Department for Education indicate a notable drop in prep-school-aged pupils (8 to 13 years old) enrolled in independent schools, declining by 5.9 percent from 253,710 in 2023 to 238,763 in the 2025-26 academic year—the lowest recorded in a decade. In contrast, the state sector saw a comparatively minor decline of 1.2 percent during the same period.

Several standalone prep schools have announced closures this year, citing rising operational costs and VAT-related financial burdens. David Sinclair, principal of Sompting Abbotts School in West Sussex, one of the country’s oldest independent nursery and prep schools established in 1921, identified VAT on fees as a critical factor in the decision to close. Similarly, Avon House School in Essex closed due to “increased operating costs, declining pupil numbers and the additional financial pressures arising from VAT,” according to head Amanda Campbell. Other historic prep schools, including Exeter Cathedral School and Woodcote House School in Surrey, have also ceased operations since early 2025.

Harrison emphasized the responsibility of larger schools and educational groups to support smaller institutions during this challenging period. Sedbergh School, part of a group that oversees several prep schools and notable alumni such as England cricketer Harry Brook and former rugby captain Will Carling, is among the major public schools expanding through acquisitions to consolidate the sector.

The government framed the decline in private school enrolments as part of broader demographic trends affecting the entire education system, rather than solely a consequence of the VAT policy. A spokesperson highlighted that removing these tax breaks is projected to generate £1.8 billion annually by 2029-30, funds intended to support public services and benefit the majority of children enrolled in state schools.