Private schools across the country will be trying to figure out how much of the 20% being incurred by VAT they can absorb, but Eton College has today told parents to fork up the additional funds
The college states in a letter to parents that the ‘news was not unexpected’ and it is regretful the ‘government has chosen to tax education in this way’.
The school fees are currently £52,749 a year and parents will now have to cough up £63,000 for most students from January 2025.
The college said it had been anticipating the move for ‘some time’ and had sought ‘extensive specialist advice’ to come to this scenario.
The new school year begins for some of the pupils on 4 September, but this term will still be exempt from the additional fees.
The letter from the provost of Eton College, Lord Waldegrave, stated said: ‘Parents will know that we have no latitude to reduce VAT itself: 20% will need to be added to whatever fee Eton charges and so the amount due will be governed by the level of that fee.
‘Please be assured that we are continually reviewing our cost base to ensure we keep costs as low as possible, whilst not compromising the quality of the education we provide.
‘In addition, the government has announced that independent schools with charitable status will, from April 2025, no longer be eligible to claim 80% business rates relief. This will add over £1.2m per annum to our current cost base.’
Although the full 20% hike is being shifted towards the parents, VAT on some costs and services will be able to be recovered from the day the VAT is added.
Only students attending through bursaries will be free from the rise. Additionally, if those that receive a part bursary with parents that cannot afford the rest of the cost the school has agreed to ‘increase your bursary to cover the entire cost of VAT’.
The school will be setting aside around £10m for financial assistance to support families who will find it difficult to pay the extra amounts.
The Eton College letter continued: ‘The provost and fellows appreciate that the imposition of VAT is unwelcome news and are also keenly aware of the impact of this decision on all our parents.
‘Please be assured that we will continue to focus on the costs of the school moving forward, although we will not compromise on the quality of the education provided to your sons.’
VAT on school fees from January 2025 | 29 July 2024
Story by Will Drysdale from Accountancy Daily
