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Original poster

Eton in line for £4.8m in windfall from VAT recovery

60 replies

HooverIsAlwaysBroken · 19/10/2024 09:13

https://www.telegraph.co.uk/money/jobs/schools-universities/eton-claim-48m-vat-clause-labour-private-school-tax-law/

i know that many people are fed up by this topic, so feel free to scroll by.

But for those who are supportive of the proposals, even though it has impact on children with SEN and military families…. Are you equally supportive of tax payer money funding swimming pools and boarding houses at the elite schools?

Am I being unreasonable in thinking that this policy should be properly looked into and assessed before implementation?

Eton in line for £4.8m windfall from Labour VAT raid

Legislation allows colleges to recover historic VAT paid on building projects

https://www.telegraph.co.uk/money/jobs/schools-universities/eton-claim-48m-vat-clause-labour-private-school-tax-law

OP posts:
LaPalmaLlama · 19/10/2024 09:37

TeaCupSallie · 19/10/2024 09:31

Eton is passing on the full 20% VAT so any monies they receive in return will be profit so yes, Eton is quids in.

Well yes and no. The view they are taking is that that capital expenditure was over ten years and shouldn’t be used immediately to offset VAT for current pupils in 2024-5 at the expense of future ones. By implementing the 20% VAT on fees now and reclaiming the 4.8m on historic capex they can use the reclaimed VAT to benefit pupils over the long term. Eton doesn’t have any shareholders and can’t therefore make a profit ( it can only build a reserve) so the only people that can benefit are the students, current and future.

re school fees in advance, it’s very unclear whether these will actually be exempt from VAT beyond fees paid for the 2024-5 school year because of how these advance fee schemes are worded.

Original poster
HooverIsAlwaysBroken · 19/10/2024 09:34

TeaCupSallie · 19/10/2024 09:31

Eton is passing on the full 20% VAT so any monies they receive in return will be profit so yes, Eton is quids in.

That is really good to know. Hope they use the money to invest in even better facilities and excellent teaching. Good for them.

OP posts:
TeaCupSallie · 19/10/2024 09:31

Eton is passing on the full 20% VAT so any monies they receive in return will be profit so yes, Eton is quids in.

Original poster
HooverIsAlwaysBroken · 19/10/2024 09:31

LaPalmaLlama · 19/10/2024 09:22

I mean, that’s how VAT works ( if you charge output VAT you can reclaim input VAT) so any school that has made major capital investments in recent years or continues to do so will be able to claim back the VAT they’ve paid on them. The larger the school, the more likely that they’ve done these big projects. But it does mean that the net VAT from Eton will be a wash for about 3 years

That is a good point. In the longer term it will be more equal, that is nice.

In the short term, for SEN / military families: do suck it up. For children at elite schools: hope you enjoy your amazing facilities, great that we could reimburse the VAT, have fun with the extra millions for now.

OP posts:
twistyizzy · 19/10/2024 09:31

LaPalmaLlama · 19/10/2024 09:29

Edit: sorry - my maths is absolutely shocking- actually Eton will owe about 13 million a year in VAT on fees ( 1300 students and 50k ish fees at 20%) so this input VAT isn’t really a big deal is it?

Many parents at Eton will have been able to afford to pay for fees up front without VAT prior to July 24.

LaPalmaLlama · 19/10/2024 09:29

Edit: sorry - my maths is absolutely shocking- actually Eton will owe about 13 million a year in VAT on fees ( 1300 students and 50k ish fees at 20%) so this input VAT isn’t really a big deal is it?

Original poster
HooverIsAlwaysBroken · 19/10/2024 09:28

To be honest, I am just watching this unfold at the moment.

I don’t think it will raise any money overall, it will have a bad impact on some groups of children with SEN and on military families (we are neither but I feel for them) and some class sizes in certain state school will increase massively. Oh, and let’s not forget children whose parents did not budget for a 20% increase and have to leave the school in a GCSE / A-Level year. But all good because it is ideologically sound and it will all be good in the long term.

Now it appears that truly elite schools such as Eton gets taxpayer money for their amazing facilities. This will also amend itself in the long term. In the short term, it is a nice boost to the richest in society. Everyone happy?

or should we just do a proper impact study and cost-benefit-analysis of this before implementing it?

OP posts:
LaPalmaLlama · 19/10/2024 09:22

I mean, that’s how VAT works ( if you charge output VAT you can reclaim input VAT) so any school that has made major capital investments in recent years or continues to do so will be able to claim back the VAT they’ve paid on them. The larger the school, the more likely that they’ve done these big projects. But it does mean that the net VAT from Eton will be a wash for about 3 years

twistyizzy · 19/10/2024 09:21

New data shows it's going to cost Foreign Office over £1million this year, before any revenue comes in.
There are now 3 x separate legal challenges.
Teaching union, headteacher unions, accountancy firms, IFS (who wrote the 1 report Labour based this policy on), SEN charities, military family representatives have all told Labour to pause or stop the policy. Labour refuse to listen and instead, Phillpson continues to post divisive and petty comments.
Everything some of us said would happen, is happening.

Sailonsilverrgirl · 19/10/2024 09:17

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