A Very Unusual Charity: Eton College

Eton College is the principal fee paying school in Britain. Surprisingly, it’s also a charity. As a result, those who attend Eton are subsidised by the taxpayer.  Charities in Britain have a number of finanacial advantages reflecting their charitable work: their contribution to the well- being of society. At first sight it appears odd that Eton qualifies but successive governments have let this anomaly stand. Fees are reduced by these special privileges to the benefit of those who will, to coin a phrase, ‘inherit the earth’.

Eton College is a very successful business. It has 1,300 pupils who pay fees amounting to circa £38.69 million p.a. ( 20% of their pupils pay less than the £33,270 annual fees.) VAT (UK transaction tax) exemption is worth circa £7.74 million to Eton. Additionally, Eton has property valued at £62 million and an investment portfolio of £213 million, both of which produce an income*. Each one of the the 1,010 pupils paying full fees are subsidised by £6,554 from VAT exemption. Full fees would be £39,924 if VAT exemption didn’t apply. An interesting comparison is with Harvard University (USA), which charges $67,844 (£39, 908) for its students. This is virtually identical to Eton- £33,270 + £6,654 (VAT exemption) = £39,924. The key difference is that Harvard is a private university. Harvard is also a world- renowned research university and Eton came 37th in the GCSE** league tables (2013) beneath many state schools.

Charities in Britain have many other benefits. Business rates are one fifth of the full rate and Eton pays no corporation tax. (I can’t calculate the impact of this for Eton.) Charitable  Gift Aid legislation adds a further 28% to parental donations and fund raising activities creating a further income stream. Eton claims that a fifth of their pupils receive a discount. Pupils receiving this discount are an elite, selected to add lustre to Eton: they are cherry picked for Eton’s ‘charity’***. This appears to be ‘window dressing’ for the Charity Commissioners’ perusal. Eton provides subsidies for poor pupils. The state then provides (invisible) subsidies for the vast majority of its (very rich) pupils. The deal for parents is quiet clear. Those paying full fees are subsidised by the state to total of £6,654 p.a.

Put that £6,654 benefit in other contexts. The state allocates £5,086 per pupil for schools in the outer London Borough of Havering, which is £1,568 less than the VAT subsidy to pupils at Eton. The basic state pension in Britain is £5,881 p.a. or £773 p.a. less than VAT subsidy provided for the children of the wealthiest people in Britain. Unemployed people, under 24 years old, can claim Job Seekers’ Allowance (JSA) for six months amounting to £1,491, which is well below 50% of the VAT exemption given to pupils at Eton. JSA can only be claimed for six months, unlike five subsidised years for Eton pupils. Charitable status for Eton is a profitable anomaly to say the very least.

Invisible state aid to the independent education sector is unjust and inefficent. Parliament is dominated by a gigantic oligopoly of privately educated MPs lobbying for their old schools. In all 35% of MPs (229) were privately educated as opposed to just 7% of the general population. Astonishingly, 20 MPs were educated at Eton, a massive 3% of all MPs****. This is legislation by the rich for the rich. So the benefit culture is alive an well and living at Eton College.

*Eton College Financial Statement, 31 Aug 2013 (fees are for 2014)
**GCSE is Britain’s national 16+ examination sat by all pupils.
***Top six mathematician (aged 16) Warren Li moved from a York Comprehensive to Eton Sixth Form and will represent Britain at the 2015 Mathletics. Presumably he will forever more be known as an old-Etonian. Guardian 4th June 2015
****All figures are for MPs elected in 2010


The May 2015 British general election has seen 52% of the Conservative MPs, who were privately educated, elected to Parliament. The Conservative Party is the majority party and has formed a new government which will be in power until 2020. Doubtless they will continue looking after the charitable status of the private schools.

This entry was posted in Economics, Politics, School, statistics and tagged , , , , , , , , . Bookmark the permalink.

23 Responses to A Very Unusual Charity: Eton College

  1. Neil Welton says:

    When I first learnt of Eton College at the age of about twelve I couldn’t believe a small number of boys of my age were going to have such an education. I did not want to believe and I just could not believe such a school was going to continue for my generation too. Just as it had done so for countless generations of boys before us. I simply couldn’t understand why all the parents and all the adults wanted it to continue. Couldn’t they see how unfair and unjust this was? Couldn’t they see how such schools were going to perpetuate inequality in society? Couldn’t they see that the class system was going to continue if you allow some boys to have such an advantage and privilege within education? It is difficult to explain, and as a teenager I never thought I would say this, but as you become older you slowly begin to see for yourself the important role a school like Eton plays in education. You begin to understand and also to acknowledge the invaluable and incalculable role such a school plays in educating each generation. Above all else you begin to see how special it would be if it continued. Not only for the next generation but also for the future generations of boys who will follow after them. In perpetuity. Put simply the boys who attend Eton are just very lucky and also very fortunate so to do.

    • odeboyz says:

      Thank you for your comment

      “Above all else you begin to see how special it would be if it continued. Not only for the next generation but also for the future generations of boys who will follow after them. In perpetuity. Put simply the boys who attend Eton are just very lucky and also very fortunate so to do.”
      I sense that more than an assertion is needed at this point. It isn’t obvious to me that the special qualities of Eton do need to be preserved. I especially don’t think that the taxpayer should provide aid for the “very fortunate” who do attend.

  2. H2shoes says:

    I can’t find Eton College on the current register of the Charity Commission for England and Wales, however, I did find Cardiff University, which is rather more interesting. It features in the top 10 of income of all UK charities and for the single year (2019) it had income of £538,500,000. It probably needs to have a close look at its finance team, as it made more than £12m loss on its investments in that year. It does make me wonder why the government needs to give it grants of over £131m: –

    “Total income includes £46,420,000 from 691 government contract(s) and £131,685,000 from 3121 government grant(s)”

    • odeboyz says:

      Thank you for your comment.

      I must look up Cardiff as it didn’t feature at all in my original research.

      A negative return isn’t that unusual. Practically every Fund Manager either under-performs the market or makes an actual loss on occasions and this year will be very challenging for them.

      Government grants to universities cover many categories and you’d have to drill down to discover where the money was allocated.

      • H2shoes says:

        Surely the government should be taking a holistic view of the organisation when it allocates funds? Why can’t the University divert donations to the relevant area of need? I suppose I should ask Cardiff University that.

        In essence my original comment was about the fact that Eton College is often singled out for criticism, as if somehow it is the only institution which receives government funding. I very seldom hear fo the good that it does, e.g. do you think people know that it offered vacant boys’ rooms free of charge to NHS key workers during lockdown?

      • odeboyz says:

        Thank you for you reply.

        Eton College wasn’t singled out. An occasional act of charity doesn’t make it charitable in the sense that the NSPCC is a charity.

        Cardiff university will weather the storms of Brexit and Covid-19 better than a lot of universities. Universities provide a public good and are therefore funded in that respect. Research is funded also for the greater good.

  3. Website says:

    Unquestionably believe that that you stated. Your favourite reason seemed to be at the net the easiest thing to be aware of. I say to you, I certainly get annoyed even as other people consider issues that they plainly don’t know about. You managed to hit the nail upon the highest and defined out the whole thing without having side-effects , other people can take a signal. Will likely be again to get more. Thank you|

    • odeboyz says:

      Thank you for this. The idea that the hard-working-taxpayer is subsidising the very wealthiest people on the planet is obnoxious. But they have a grip on Parliament and os nothing will ever be done. So much for, ‘We’re all in this together.’

  4. Pete Neras says:

    Perhaps Eton College’s financial statement doesn’t appear to recognise the ‘true impact of state subsidy’ is because there’s none received by them whatsoever. And I would entirely agree with them.

    Politicians in particular, would like to have us believed that tax breaks and subsidies are one and the same thing whilst in reality they are two different animals. The definition of a subsidy is, “a direct pecuniary aid furnished by a government…”; “a grant or contribution of money”; “a sum paid…”; etc. Eton College received none of those – not a bean!

    Subsidies are monies taken (by force) from taxpayers by governmental powers and given to someone else. Tax breaks are the government saying you can pay less or even keep all your own money:


    Hope the above explanation of the difference between a subsidy and tax break is useful. Thanks for responding.

    • odeboyz says:

      An alteration in the tax relationship is nrmally seen as a (covert) subsidy.Additionally they do recognise it because they say that they don’t ‘profit’ from it as they spend more on their charitible works theanthey get. (This is a point you also make.) Closet subsidies like all subsidies distort the market andthey don’t cease to be subsidies merely because of tricky accounting. I sense I have no more to say on this matter but thank you for the opportunity; I try to write 600 words & it is a bit tight for a complex post.

  5. Pete Neras says:

    Well, I’m looking at a much, much wider picture. Independent schools especially most of the UK’s top pubic schools are often criticised for their charitable status. This is only a very narrow tunnel vision on the part of the critics. But what is often not reported either through ignorance or prejudice or selective reporting or a combination of all three, is the billions of pounds (yes, billions!) generated by the private school sector to the UK economy:


    Eton, for example, is on record to say they spend more each year on charity than what they receive in tax breaks. Thank you for your response.

    • odeboyz says:

      Eton College is an elite school and a destination in the international education market unlike the majority of independent schools who are neighbourhood day schools. There are circa 512,000 children in independent schools and most are in the ‘undistinguished’ bracket they generate nothing beyond their own income. I’ve looked at the Eton College financial statement and it doesn’t appear to me that they have ‘recognised’ the true impact of state subsidy on their accounts. I thought that the site you attached was full of artistic licence and double counting. The independent sector also has some companies that are For Profit, Cognita being a prime example, and they operate comfortably without state subsidy. Need I say any more? Thank you for your comments.

  6. Pete Neras says:

    “As a result, those who attend Eton are subsidised by the taxpayer. ”

    Oh really? If Eton and all the other fee-paying schools didn’t exist, where do all these kids go for their education? And what about their teachers? They would ALL go to state schools and please tell us the figures that would cost the government seeing that you’re so hot on statistics and figures.

    • odeboyz says:

      Assuming the buildings still exist along with investment and property portfolios deleting the charity status does not imply deletion of the private school sector. However it does imply that the charity status is a state subsidy. So! Some parents will not be able to pay the real cost of their children’s education and will, as you rightly say, revert to state education. And that will be an additional cost which will have to be met. The Parliamentary Committee estimates the direct cost of state subsidy to independent schools at £100 million p.a. And that is a clear under- estimate as it doesn’t cost in subsequent savings. Do the two figures add up? I.e. Would the additional pupils decanted out of private schools cost more/less than circa £100M? I don’t know but it does feel like unnecessary subsidy to me. So I am making both an economic and a political point. Thank you for your comment.

  7. Pingback: Hornchurch and Upminster Labour | A Very Unusual Charity: Eton College

  8. Diane says:

    It’s true. We need to start an alternative paper – not run by the Eton/Oxbridge elite! I wonder what the private/’public’ school sector as a whole gain out of this system. It won’t be just Eton..

  9. Diane says:

    Seems unbelievable. You need to bring this to a wider audience to challenge the ‘benefit-scoungers’ discourse. The Guardian or New Statesman could be interested…

    • odeboyz says:

      I’m quite sure they all know because they too belong to same elite of ‘Old Boys’. The consequence of a state supported elite is that it is self perpetuating. After 1997 I gave up all hope that the tax system would be fair: the demonisation of the poor since 2010 is just a continuation of the Blair policy but in trumps.

  10. Peter Baxendale says:

    Staggering,Chris- I cannot take in at one sitting so will ask my butler to download this in its entirety.

  11. Chris R says:

    It certainly seems to be in a ‘Mess’. The whole ‘Charity’ system is in a mess. I expect there are much worse cases of ‘Charity Status’ abuse. ( another topic for you Chris ?). What you did not compare was the cost of the ‘Uniforms’ for Eton and Havering !!
    I see that assets for the Cambridge colleges are worth £4 billion and Oxford £3.3 billion.
    It is good that we have an elite school somewhere. Even the Nazi hierarchy wanted to send their kids to Eton after they had won.
    I expect that most of the USA government top bods have had a privileged upbringing. It is not that they are the best for the posts but a case of jobs for the boys, which I am afraid happens in all walks of life; its just that it affects us most when rife in Parliament.
    The following link expresses similar views to Chris’s.

  12. delsmith444 says:

    Well done Chris, concise and illuminating, like a laser beam.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.