Eton to raise fees to £63,000 in response to VAT change

 

Eton to raise fees to £63,000 in response to VAT change

 

Other private schools say they will absorb some of the cost of the removal of VAT exemption

 

Tobi Thomas

Fri 30 Aug 2024 17.40 BST

https://www.theguardian.com/education/article/2024/aug/30/eton-fees-increase-vat-private-schools

 

Eton college has sent a letter to parents saying it will raise its fees by a fifth in response to the government’s removal of the VAT exemption on private schools. The annual fees will increase from £52,749 to about £63,000.

 

In the letter, the school said: “The provost and fellows regret that the government has chosen to tax education in this way.

 

“Furthermore, we are disappointed that the introduction of VAT will take place partway through an academic year and at short notice. We recognise the concern that will be felt by many parents following this announcement.”

 

From January the government will remove the VAT exemption and business rates relief for private schools, in order to generate funding for 6,500 new teachers in state schools.

 

Currently, independent schools do not have to charge 20% VAT on their fees because there is an exemption for the supply of education.

 

The largest private girls’ school trust has also announced that it will raise its fees by 12% from the new year over the government’s VAT plans.

 

The Girls’ Day School Trust (GDST), which represents 23 private schools in England including Wimbledon high school, Blackheath high school and Shrewsbury high school, said it would absorb the remaining 8%.

 

A 12% increase in the average national annual fees for a day school of £18,064 would bring them to £20,232.

 

In a letter to parents this week, the GDST said: “Since the government’s announcement at the end of July, we have worked at pace to deliver on our commitment to reduce appreciably the overall financial impact of these tax changes on your fees.

 

“Following a detailed review of our costs and approval from trustees, we are now in a position to confirm that fees, inclusive of VAT, will rise by 12% from January 2025.

 

“We have managed to mitigate the full financial impact of 20% VAT and the removal of business rates relief by using the opportunities that our size and scale provide, and by passing on any benefit we may receive should we be able to reclaim VAT on other aspects of our running costs.

 

The largest proportion of our outgoings is investment in our staff, which we will not compromise on in our delivery of the academic, co-curricular and pastoral excellence you expect from our schools. We appreciate the financial pressures that will be felt by many of our families.”

 

The government has been contacted for comment.