If VAT is added on Private School Fees, then it will be added onto University fees as well

As a matter of principle, education should not be taxed, full stop.

There is VAT on a course (normally viewed as training spend), but as a individual, you can't reclaim the VAT but if you are a VAT registered business you can.

So if I take a course as an individual, there is no VAT ?

Or is this indeed an example of education being taxed (and has been since forever) but nobody noticing ?

This a moot point as most employers are VAT registered and will be able to reclaim this VAT. The only people who can't are the end consumers.

As a matter of principle, education should not be taxed, full stop.

Why did my employer have to pay VAT on my last training course then ?

Or - to be slightly more germane - why are we not calling for training courses to be VAT free ?

So "Yes" then ?

Overseas students already keep our unis afloat and subsidise everyone else - so to slap a 20 per cent tax on would be risky. They may stop coming as much and then what? Everyone loses out. The argument is pretty much the same as for private schools. As a matter of principle, education should not be taxed, full stop. It is an investment in the future generation. It is divisive and pointless and was always only political point scoring anyway. It was never going to raise any funds. The problem is they have gone so far with it, they cannot backtrack anymore.

@SerendipityJane sorry I don't follow.

Does that mean the HMRC could generate VAT from overseas students and keep the income as it is not refundable?

@SerendipityJane that only applies for items they export from the UK when they leave, and goes hand-in-hand with legislation that they may be then required to pay an import tax on the good to their own country's government so the VAT is refunded so that they only pay tax once to one government. They still have to pay the full VAT on goods and services enjoyed while they are here e.g on restaurant bills, food purchases consumed while in the UK, and the VAT on e.g phone services or tv subscriptions that they buy while they are here. The education they receive isn't an exportable commodity so they wouldn't get a refund.

@SerendipityJane
"Wouldn't that depend on the UKs agreements with those countries ?
When we were in the EU, tourists from outside the EU were allowed to claim VAT back when they left the country ..."

This is a fair point. But worth highlighting that 663,355 from outside the EU, that's 87% of the total.

Why not charge VAT on those overseas students University who haven't contributed to tax system but want to benefit from the education system in the UK. It would generate more in tax income and not overly burden a state system that is clearly struggling, from those in the private system that can no longer afford it.

Wouldn't that depend on the UKs agreements with those countries ?

When we were in the EU, tourists from outside the EU were allowed to claim VAT back when they left the country ...

I have read through various arguments on both sides and thought this may challenge some people's options!

758,855 overseas students
https://commonslibrary.parliament.uk/research-briefings/cbp-7976/
Overseas student numbers in 2022/23 there were 758,855 overseas students studying at UK universities, 95,505 of whom were from the EU and 663,355 from outside the EU. The total was the tenth record high in a row and 26% of the total student population

Approximately 554,243 pupils
www.statista.com/statistics/1447867/uk-private-school-pupils/#:~:text=As%20of%202023%20there%20were,544%2C316%20in%20the%20previous%20year.
As of 2023 there were approximately 554,243 pupils attending private or independent schools in the United Kingdom, compared with 544,316 in the previous year

Why not charge VAT on those overseas students University who haven't contributed to tax system but want to benefit from the education system in the UK. It would generate more in tax income and not overly burden a state system that is clearly struggling, from those in the private system that can no longer afford it.

University's use these overseas student to boost their income and it highlights how University's have lost sight of why they were setup originally.

Happy to hear people's thoughts? But keep them civil.

From a struggling parent with kids who were failed by the SEND resource in the local state schools.

The way the proposed legislation is worded VAT would be payable on Uni fees (and possibly nursery fees also). It is possible that the wording could be changed to single out the private school sector

No need. It already DOES specify schools, and excludes HE and nursery and childcare provision.

Maybe you should read it?

It’s more scaremongering from private parents. Sorry, not sorry that the embossed notepaper might be on it’s way out…

Amazing how many people have strong views but no understanding of the position. Education is a VAT exempt sector, charitable status has no impact on VAT but provides other “tax breaks”. Contrary to other comment almost all universities have charitable status.

The way the proposed legislation is worded VAT would be payable on Uni fees (and possibly nursery fees also). It is possible that the wording could be changed to single out the private school sector but that may leave the Govt open to legal challenge for discrimination, there are already legal challenges to the existing proposals under Human Rights legislation

@WannabeMathematician

So my point is that the tax take labour hope to make won’t be there. Like many occasions where you put up taxes, the amount you actually raise goes down.

To be honest the Tory party have a lot to answer for too in the way aspirational middle to high earners with children are already being shafted.

i know many high earners that have given up, max out their pensions and stick up two fingers to HMRC.

a good podcast to watch is https://ifs.org.uk/articles/how-fix-our-irrational-income-tax-system

@Thesmokinggnu I don’t understand the point you are trying to make in your last paragraph. Could you expand it? It’s not clear why that’s a bad thing in policy makers minds? Or rather why the moral argument out ways the financial argument and which one you are trying to make.

I think part of the problem seems to be that I don’t understand is labour are trying to make an ethical or financial argument.

Lack of critical thinking is how we end up with poor policy decisions, that get support at the ballot box.

Overall I think that tax take will go down. The IFS paper is a political hatchet job that doesn’t look at the wider landscape.

A lot has been said about the costs of education on here. Adding VAT to school fees will be the straw that breaks the camels back for many aspirant families.

What a lot of people don’t know is that the highest rate of tax in the UK is 60%. This is levied on earners between £100k and £125k because they loose the personal allowance. Anyone earning in this space or just over will pull their kids out then jam the savings into their pension and retire early with a nice tax free lump sum…

No idea what it has to do with your retirement but this one takes the biscuit.

Look around you. Look at the ludicrous policies people are queuing up to support.

If you want policies to be evidence based and subject to critical thinking, you wouldn't start here , thank goodness. Otherwise my retirement would be well fucked.

People might see what a farce the policy is

Not really. It would put too many people out of work who rely on the credulous.

Anyway, you can lead a horse to water, as they say.

Frankly with the amount of misinformation about so think we need more people trained in critical thinking ( English , history etc ) than less

Everything @titchy just said.

My PhD had an element that particularly focused on first generation students and applying to university. I found that for 18 year olds studying on a level 3 course university was seen as a natural progression, regardless of whether you were a first generation student or from a lower socioeconomic background. What did differ was the type of university, a tendency to stay local and the type of subject.

Non traditional students are already less likely to make choices (subject or university type) that lead to higher paying careers. Making certain subjects more expensive would only make this gap wider.

That is a kick in the teeth for those who never thought of university because their parents didn’t go

That argument doesn't hold up though. 40% of 18 year olds now go to uni - the majority of those won't have had parents who went. Demand increases each year - and across all income groups. Finally those from low income households can get £10k a year maintenance so that shouldn't be a barrier.

Now I know that the threshold for full maintenance hasn't increased, and that the value of loans also hasn't kept up with inflation - and those factors URGENTLY need addressing, but adding VAT to fees isn't the answer - and would have perverse effects: making philosophy degrees more expensive is bad for social mobility.