Eton College warns VAT change will hike annual fees to £63,000

30 August 2024, 17:56 | Updated: 30 August 2024, 21:25

Parents whose children are taught at Eton College have been told fees are "likely" to rise by 20% in January to about £63,000 a year because of VAT changes.

That is an increase from £52,749 currently charged for those attending the private boys' school near Windsor in Berkshire.

Parents whose sons are in receipt of 100% bursaries will not be affected by the hike, the college said.

From January, the government plans to remove VAT exemption and business rates relief for private schools.

The controversial changes aim to fund 6,500 new teachers in state schools.

The boarding school, which was founded in 1440, has educated dozens of famous names including Princes William and Harry, Boris Johnson, Eddie Redmayne and Bear Grylls.

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

In a letter to parents, the boarding school said the governing body regrets "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."

The college said it will do its "utmost" to ensure that financial assistance is available to all those who cannot afford the additional VAT.

It is also considering increasing the current £10m financial assistance pot to help those who "now face an unaffordable increase in the cost of their education".

Read more from Sky News:
Reeves is under attack over tax and fuel
Analysis: Labour needs consistency on tax policy
Starmer signals tax rises coming

Meanwhile, Prime Minister Sir Keir Starmer believes private schools will adapt to VAT tax changes, adding that "they don't have to pass the cost onto parents".

And recently Education Secretary Bridget Phillipson said private schools which have closed have themselves to blame - dismissing any suggestion they have shut because of the government's VAT policy.

Last year, a report by the independent Institute for Fiscal Studies (IFS) said the average private school fees across the UK were £15,200 in 2022/2023.

The report said this is £7,200 or nearly 90% higher than state school spending per pupil.

(c) Sky News 2024: Eton College warns VAT change will hike annual fees to £63,000