Eton College is gearing up for a substantial £4.8 million VAT rebate, coinciding with a significant pay increase for its headmaster.
Recent legislation now permits private schools to reclaim taxes on capital expenditures made over the last decade.
This move could see the Labour government potentially returning millions to some of the wealthiest educational institutions in the UK.
The Impact of Recent Investments
Eton College, renowned for educating 20 of the last 58 Prime Ministers, has recently splurged on upgrades, including a new swimming pool and an advanced boarding house.
A financial review conducted by The Telegraph revealed that Eton has spent approximately £42.5 million on capital projects over the past four years, making them eligible to reclaim at least £4.8 million from the government.
With the new legislation allowing for claims on expenditures dating back 10 years, the total rebate could be significantly higher.
Headmaster’s Pay Rise and Increased Fees
In the midst of these financial maneuvers, Eton’s administration awarded Headmaster Simon Henderson a hefty 40% salary increase.
As school fees rise by 20% to account for Labour’s new VAT charge, the cost for attending the elite institution will jump from £53,000 to nearly £63,000, as reported by The Times.
A letter sent to parents in August emphasized that the school had “no latitude” to absorb the costs or lessen the impact on fees, except for students receiving full or partial bursaries.
Salary Comparisons and Clarifications
Henderson’s annual salary is now estimated to be between £370,000 and £380,000, reflecting an increase of about £100,000 from the previous year.
For context, the average headteacher salary in Britain is around £73,335, according to the Office for National Statistics.
However, this average doesn’t distinguish between primary and secondary school leaders, with secondary heads typically earning more.
Eton College’s Response
An Eton College spokesperson stated that it would be inappropriate to speculate on the figures while the full policy details are still pending.
They clarified that all capital projects are funded through the school’s endowment and donations.
In August, parents were informed about the expectation of recovering VAT on certain products and services by January 2025.
Although specifics remain vague until the full policy is released, the college plans to prioritize the rebates for those in greatest need.
Government Perspective
A Treasury spokesperson emphasized that VAT regulations for private schools will generally align with those applicable to all businesses, including capital goods.
The unfolding developments surrounding Eton College raise questions about the broader implications of these financial changes on elite education in the UK.
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