Update on the First Year of VAT at the Lycée

At the School Council meeting on 22 April 2026, the Finance Department provided a brief report on the position regarding UK VAT recovered for the 2025 financial year.

As a reminder, VAT was applied to our establishment, along with all independent schools in the United Kingdom, from 1 January 2025. This resulted in a 20% increase in our school fees. In addition, a general 4% fee increase decided by the AEFE was applied in September 2025.

The school thus collected £6.8m on behalf of HMRC from £34m of school fees (ex VAT), for a total revenue of £47m inc VAT. (including £6m of non VATable revenue)

The school was able to reclaim VAT on the following costs:

• £485k relating to previous years (£288k in respect of goods and services for 2024 and £197k for investments over the last 10 years),
• £700k relating to operating costs in 2025,
• I.e. £1.185m total

(Note: School meal fees and those relating to Petite Section classes are neither collected nor recoverable.)

In other words, out of the £6.8m collected on behalf of HMRC, the school has been able to reclaim £1.185m.

m£	ex-VAT	VAT collected/paid
Revenue	34.2 subject to VAT 6 non-subject to VAT 40.2 total	6.8 0 6,8
Expenses	39.9	1.1 of which deductible : 0.7
Reclaimed on previous years (CE 08/12/2025)	–	0.485
Total VAT reclaimed		1.185

This sum of £1.185m is currently held in the school’s cash reserves (representing approximately 3% of the 2026 budget).

It is legitimate to ask what will happen to this additional cash. During the financial webinar in February 2025, families were told that the school would wait until it could accurately assess the recoverable amounts before committing to any adjustments to fees. The Director of the AEFE subsequently stated that this money would be used to minimise future school fee increases.

The figures are now known, and the Senior Leadership Team has indicated that it wishes to allocate this cash reserve towards a multi-year capital works plan.

The CIPL’s position is that building works and maintenance of the school estate are the responsibility of the AEFE, and that families already contribute to this via the PFC.