A financial expert has warned of potential "carnage" in the private school sector this summer, due to the imposition of VAT on fees.

From Wednesday, January 1, private schools across the UK have been required to pay 20 per cent VAT on fees.

This was introduced by the Labour government after they were elected in July.

Duncan Swift, partner and business restructuring expert at accountancy firm Azets, which has an office in Southampton, said the impact of this tax will become apparent during the summer holidays.

He said: "It will be over the summer holidays that the potential carnage in the private school sector, which educates approximately 615,000 children, will become evident, particularly for those in regions away from London and the south east."

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Duncan Swift, partner at Azets, warns that the government's VAT imposition on private schools could lead to chaos this summer as the full impact becomes clear (Image: Azets) He criticised the government's decision to introduce the VAT mid-academic year, stating it left parents with limited options as withdrawing children mid-year would disrupt their education.

As a result, schools are now grappling with shortfalls in admissions for September.

Mr Swift said: "Schools are now scrambling to get early confirmations of pupil numbers for September and are facing shortfalls on admissions at present because a significant number of parents remain undecided."

He revealed that some schools have already closed due to the unworkable business model created by the VAT imposition.

He predicts more closures, mergers and asset sales before the situation stabilises.

Mr Swift's advice to schools is to remain agile, plan for all scenarios and consider consolidation of operations.

He said: "I know of at least six schools which have closed, citing the VAT imposition as making their business model unworkable.

"We are likely to see more closures, mergers, school consolidations, asset sales and property repurposing before the dust settles."

This warning comes as a High Court challenge to the Government’s imposition of VAT on all education services was held in early April, with judgement yet to be delivered.

The government predicts the VAT on fees will result in 37,000 pupils leaving the private sector, equating to about 6 per cent of the current private school population.