Why doesn't the reduced VAT rate for long-stay accommodation (28+ days) apply to boarding at a private school?

Tuition at private schools became standard rated wef 1 January 2025. The 20% VAT cost also applies to boarding services which are specifically excluded from the reduced VAT treatment that applies to long-term hotel stays.

1. The 28-Day Rule is Specific to Certain Types of Accommodation

The reduced VAT rate for long stays (after 28 days) applies only to:

Hotels, inns, boarding houses, and similar establishments that supply short-term commercial accommodation (Sch 9, Group 1 Note 9, VATA 1994 and HMRC Notice 709/3).

After 28 days, VAT is reduced because HMRC treats this as quasi-residential (not holiday/commercial) usage. It's a narrow relief for the hospitality sector.

 2. Private School Boarding Is Not a “Hotel or Similar Establishment”

The key phrase in legislation is “hotel, inn, boarding house or similar establishment.” A school — even one that provides lodging — does not fall within this category.

Boarding schools are not in the business of supplying holiday or hotel-type accommodation.

Their boarding is part of an integrated pastoral care and educational service, not a hospitality product.

Thus, they do not qualify for the reduced VAT treatment, regardless of the stay's duration.

3. Boarding Schools Provide a Composite Supply (But Separately Valued for VAT)

Boarding and tuition are taxed separately, even if invoiced together.

Boarding (lodging, meals, pastoral care) is a standard-rated taxable supply, and not eligible for the hotel 28-day reduced rate because it’s not commercial accommodation in the relevant sense.

4. Legislative Intent and Policy Scope

The long-stay accommodation VAT relief is not a general principle for all long-term lodging. It’s a specific carve-out for a narrowly defined commercial sector.

If HMRC allowed the same VAT reduction for school boarding, the same logic could be applied to:

·        Long-term care homes

·        University halls of residence

·        Military barracks

…but all of these are also excluded, unless they meet specific criteria under separate VAT reliefs.

Conclusion

Private school boarding does not qualify for the reduced VAT rate after 28 days because:

·        The relief is limited to hotels/boarding houses and similar establishments in the hospitality sector.

·        Boarding schools are not in that category — they are educational institutions providing accommodation as part of a broader (now fully taxable) service.

·        HMRC’s interpretation of “similar establishment” does not stretch to private schools.

4 Eyes Ltd can assist with the special VAT compliance requirements or private schools, from registration to agreeing a partial exemption special method, training and a possible Capital Goods Scheme reclaim. Please call us if you would like to discuss this matter further.