Company: GHC
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000104889-25-000022
Chunk: 188

Company: Graham Holdings Co
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 188
---
, and UK Pathways Glasgow International College applies this status. In 2019, a tax case was determined by the U.K. Supreme Court on the meaning of “college of a university.” The U.K. Supreme Court decided the case in the college’s favor. The result was more favorable to private providers working in collaboration with a university. The U.K. Supreme Court emphasized five principal tests for a private provider to meet, for it to be sufficiently integrated with a university, to qualify as a “college of a university,” even if it does not have a constitutional link to the university. Although the focus on these five tests has now been incorporated into official His Majesty’s Revenue and Customs (HMRC) guidance, it is not yet clear how HMRC will apply the Supreme Court judgment and the five key tests in practice. If HMRC’s application of the Supreme Court judgment and the five key tests deem Glasgow International College not to constitute a “college of a university” and not entitled to a VAT 

26

exemption, KI Pathways Colleges’ financial results may be materially adversely impacted if they are not able to meet any new requirements.

Following the departure of the U.K. from the European Union (EU) on December 31, 2020, the U.K. may further develop its VAT rules in this complex area separate from the EU rules. Kaplan continues to closely monitor this area.

Following the U.K. general election in July 2024, the Labour party formed a new government. Effective January 1, 2025, the new government ended the VAT exemption for private schools. The resulting 20% effective increase in tuition, boarding and other costs will materially impact enrollment of new and existing students at MPW. Kaplan believes the change currently only affects MPW but continues to carefully review the implementation of this policy. The new government has also increased employer’s national insurance contributions, a tax paid by U.K. employers to fund government benefits programs that increases the costs of employment for all U.K. businesses. The new government may make other changes to U.K. tax laws which increase the tax costs of KI’s activities in the U.K.

•    Possible Changes to the Department of Education Could Negatively Impact the Company’s Operations and Businesses.

It has been reported that the current U.S. presidential administration is drafting an order aiming to eliminate the Department of Education. The order could involve reassigning functions to other federal agencies or state governments or eliminating or downsizing functions. It is unclear which functions will be deemed