An independent Catholic school charity under investigation for failing to submit its annual financial accounts has announced it will close due to mounting cost pressures, including VAT on school fees.
Last week, the Scottish Charity Regulator (OSCR) announced that it was making inquiries into Fernhill School Ltd, which registered as a charity in 1975.
In its inquiry report, the regulator said the charity has failed to submit its accounts for the years ending July 2022, 2023 and 2024, while it found that unaudited dormant company accounts had been filed with Companies House without explanation.
In response, Fernhill School told Civil Society that it intends to close in June.
“The board has worked tirelessly to keep Fernhill School’s high standards and academic excellence preserved,” a spokesperson said.
“However, in the face of rising costs from VAT on school fees, non-domestic rates, employer national insurance, upward pressure on teacher salaries, resultant decrease in school roll, the decision has been taken to close Fernhill School at the end of this academic session in June 2026.”
In its 2024 general election manifesto, the Labour Party said it would remove the VAT exemption on private school fees if it won the general election.
Since 1 January 2025, all education and boarding services provided by a private school or connected person have been subject to VAT at the standard rate of 20%.
Fernhill School said it has been in discussion with St Aloysius’ College, a Glasgow-based Catholic Jesuit school and registered charity, to protect the continuity of education for its pupils and provide job opportunities for staff.
“Our key focus is to work with St Aloysius’ College to make the transition as smooth as possible for our families and to ensure we continue to provide academic excellence for the remainder of this academic session,” the spokesperson said.
They added that the charity will work with OSCR and ensure accurate financial statements are lodged at the earliest opportunity.
