With an agreement now reached, we finally have clarity to the question “how has Brexit affected independent schools?” It’s important for headteachers and directors to be aware of these changes, to deliver any regulatory requirements, whilst understanding their financial implications. So, what are the main ways in which private schools will be affected moving forwards?

The 3 core areas which have been impacted are:

  • staff recruitment
  • international student applications
  • importing of goods

 

Staff recruitment

Staff recruitment in the education sector is already difficult, so how has Brexit affected independent schools? Recruitment from EU countries will now become a longer process. Finding replacement staff quickly for leavers on short notice periods will be tricky.

Firstly, your school will require a “Sponsor licence” to enable to recruitment of staff from outside the UK and Ireland. A lead contact manages the sponsorship process, and ensures the school remains compliant with the licence requirements. The application process will take up to 8 weeks. It’s worth completing before any requirement arises, especially as the licence lasts for 4 years.

Tier 2 (General) sponsor licences held by schools have converted to “Skilled Worker” licences.

Regular reporting on sponsored staff requires submission to UKVI (UK Visas and Immigration).

When looking to employ candidates, the following criteria must be met:

  • Candidates can speak English at the required level
  • The advertised job is at or above the required skill level
  • The salary for the role is £20,480 or above (if they can trade points on characteristics they meet), or paid the higher of either £25,600 or the “going rate” for the role (in line with the pay scales for teaching roles)

 

The additional costs to the school from these changes include:

  • Sponsor licence application fees (£536 – £1,476)
  • Staff member sponsorship costs (£21 – £199)
  • Visa application fees – paying the Immigration Skills charge 
  • Time spent by staff managing the new processes (applications and reporting)

 

For any existing staff from the EEA (European Economic Area), it is worth checking that they have applied for an EUSS (EU Settlement Scheme) place, which they have up to 30th June 2021 to apply for.

International students

How has Brexit affected independent schools ability to attract students? Students coming from abroad must meet the requirements of a points system. International students need to achieve 70 points. 4-17 year olds achieve the first 50 points studying at an independent school. Meeting financial requirements achieves the final 20 points. In addition, students will be able to apply up to 6 months before their studies commence, instead of the 3 months previously provided.

Schools will need to become a sponsor, and pass an annual Basic Compliance Assessment. Sponsored pupils are required to be monitored for engagement with their studies. Tier 4 sponsor licences held by schools have converted to a “Student Routes support licence”.

Schools with pupils from the EEA (European Economic Area) will need to ensure that if they are intending to stay with the school after 30th June 2021, that they apply to continue their education with an EUSS place.

The additional administration may put off applications for students from EU countries. There are still other markets however, such as China, which will continue to send pupils to the UK.

Importing goods

Originally the fear of a “no-deal” Brexit was the impact of tariffs on food prices. The EU provides 26% of UK food consumed (compared to 55% from the UK). Although food suppliers face more administration for imports, this will not deliver a significant increase in food prices during 2021. 

Catering teams should review the seasonality of produce used, enabling alignment to British goods and keeping costs down. 

When directly importing goods from an EU country moving forwards, there are now additional administration processes involved. Businesses must apply for an Economic Operators Registration and Identification number (EORI) from HMRC. In addition, purchases from the EU will require claims for any preferential rates of duty available. 

The easiest solution, although more expensive, is purchasing from a UK supplier, even if they import the goods from elsewhere. If you do use this approach, be careful to ensure manufacturer warranties are still valid.

Understanding impacts on your finances

The changes in the above areas may impact your finances moving forwards. Whether that’s from increased costs from purchases or staff recruitment, or possibly a reduction in overseas students. It’s important to understand these impacts as soon as possible, to establish whether they will have a significant impact on your finances moving forwards. You may possibly want to reforecast your financial figures for this or future academic years. Alternatively, you could create some different financial scenarios understanding the impacts at different levels, e.g. if overseas students reduced by 10% and 25%.

 

It’s taken a long time to get Brexit finalised. The trade deal secured with the EU has reduced the risk of substantial increases in costs outside of staffing. Staffing may be a different issue however, and not necessarily just from a teaching perspective. For instance, a large proportion of cleaning and catering staff come from European countries, impacting future recruitment.

 

If you require any advice on the expected financial implications of Brexit for your school, or support on other financial matters, please contact me here, at paul@enrichaccounting.co.uk or on 07403 407455.