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

539 replies

AgathaCrispee · 31/01/2024 08:06

Does it worry you that this new policy of adding VAT on educational fees will also be applied to university fees as well?

AIBU to think this will put university out of the reach of the majority of families who will support their kids through Uni?

Also, for those who do go the level of debt they will come out with will be really big.

If they can apply VAT to private school educational fees then they've setup a case for Independent schools argue that it must be applied to Uni as well.

Is this going to create a situation where only the wealthy can send their kids to Uni?

I'm wondering why no one is asking this question!!

OP posts:
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coffeeaddict77 · 31/01/2024 18:16

Thesmokinggnu · 31/01/2024 18:04

I don't believe that 30% of children at private school are "underprivileged" Where I live most burseries are given on academic, music or sport merit rather than financial. Only 7% of places are completely free so parents usually just get a reduction. If parents can afford a few thousand I don't think their child is underprivileged.

Thesmokinggnu · 31/01/2024 18:16

For the benefit of doubt I would rather the state system was better and private schools were effectively redundant.

unfortunately too many state schools are poorly run and fail the students in them. I have two kids in state school but had to pull the third out due to the state school consistently failing to deal with another child that was massively disruptive.

Hercisback · 31/01/2024 18:16

@Thesmokinggnu I agree. It's a totally shit policy designed to grab headlines.
I hope it doesn't happen for many reasons.

Serpentiner · 31/01/2024 18:12

Conceivably governments can do anything they want. However, it is not in a labour governments interest to increase Uni fees. It is in their interest to increase private school fees

cyclamenqueen · 31/01/2024 18:11

@coffeeaddict77 I have worked in education and the public sector so I know that they are , I just think that they won’t with this but I may be wrong . I have a family member at one of the schools you mention so I hope I am wrong but I’m not holding my breath

Thesmokinggnu · 31/01/2024 18:10

Hercisback

If it will raise 1% of the budget - How many kids will end up in state as a result - the amount raised could easily be wiped out by the 1% extra funding needed in the state system.

Fleeceflop · 31/01/2024 18:07

Thesmokinggnu · 31/01/2024 18:02

University is “essential”. no it really isn’t unless you plan to be a doctor or engineer.

If “private education” is to incur VAT then logically this must include all at work training and day release courses, this would include university. There is currently an unlevel playing field that vocational courses are charged VAT. That means a trainee plumber is charged VAT but a lawyer isn’t. Hardly seems fair does it…

Further, if the education exemption were removed this currently would include university and any “private tutors” or similar which are currently exempted.

THEN THAT ALSO INCLUDES PRIVATE NURSEY SCHOOLS. yummy mummies beware the Montessori will be next!

you then have to ask about after school clubs and if these would include VAT.

then what about English as a foreign languages… so it goes on.

You seem gleeful at the prospect.

look at it this way, is having a university educated workforce good for the economy? Hell yeah!!! Pays us back in bucketloads. Same as nurseries. Private schools? Of course not.

coffeeaddict77 · 31/01/2024 18:06

cyclamenqueen · 31/01/2024 17:53

I personally don’t think it’s dangerous but from the governments point of view it would open the door to potentially having to increase funding every time a public body was subject to a tax increase . Imagine if the VAT on energy was increased , should central government then compensate any publicly funded body affected to cover this , what about NIC , if the cost of employing people goes up will they want to be automatically bound to cover this , unlikely. They are likely to just tell the councils to suck it up, the policy is meant to increase tax revenues not cost money . However there’s the rub, this policy will actually raise barely anything, it’s about culture wars and dividing people and that’s why I disapprove of it.

As an aside I think they could make the basic changes just by amending the regulations, I don’t think it would need a change in the law.

What makes you think that government funded bodies are never compensated for an increase in costs? Funds are increased all the time due to cost increases. They don't remain static.

Thesmokinggnu · 31/01/2024 18:02

University is “essential”. no it really isn’t unless you plan to be a doctor or engineer.

If “private education” is to incur VAT then logically this must include all at work training and day release courses, this would include university. There is currently an unlevel playing field that vocational courses are charged VAT. That means a trainee plumber is charged VAT but a lawyer isn’t. Hardly seems fair does it…

Further, if the education exemption were removed this currently would include university and any “private tutors” or similar which are currently exempted.

THEN THAT ALSO INCLUDES PRIVATE NURSEY SCHOOLS. yummy mummies beware the Montessori will be next!

you then have to ask about after school clubs and if these would include VAT.

then what about English as a foreign languages… so it goes on.

coffeeaddict77 · 31/01/2024 17:55

Thesmokinggnu · 31/01/2024 17:47

You would be surprised how it’s not the “privileged few”.

please do some research on this and understand how this will impact social mobility for many underprivileged children who currently attend for free since the Labour Party closed the grammar schools.

Rather than telling people to "do some research" why don't you post a link with the statistics showing that a huge number of "underprivileged children" are benefitting from private school. Where I live very few are.

cyclamenqueen · 31/01/2024 17:53

I personally don’t think it’s dangerous but from the governments point of view it would open the door to potentially having to increase funding every time a public body was subject to a tax increase . Imagine if the VAT on energy was increased , should central government then compensate any publicly funded body affected to cover this , what about NIC , if the cost of employing people goes up will they want to be automatically bound to cover this , unlikely. They are likely to just tell the councils to suck it up, the policy is meant to increase tax revenues not cost money . However there’s the rub, this policy will actually raise barely anything, it’s about culture wars and dividing people and that’s why I disapprove of it.

As an aside I think they could make the basic changes just by amending the regulations, I don’t think it would need a change in the law.

Thesmokinggnu · 31/01/2024 17:47

You would be surprised how it’s not the “privileged few”.

please do some research on this and understand how this will impact social mobility for many underprivileged children who currently attend for free since the Labour Party closed the grammar schools.

coffeeaddict77 · 31/01/2024 17:47

Thesmokinggnu · 31/01/2024 17:44

Unfortunately you are only being hailed by starmers dog whistle, and doing so without the facts.

Starmer himself benefited from a free education at a private school through its charitable status. He then plans to pull up the ladder behind him. Just like the labour politicians that closed the free grammar schools.

His parents chose to send him there.

coffeeaddict77 · 31/01/2024 17:46

cyclamenqueen · 31/01/2024 17:22

But it’s not hypothecated even the Labour Party have not said that the tax will be kept separate . It’s highly unlikely that the government will increase the funding to the MDS to cover the extra cost . This would set a very dangerous precedent from their point of view.

I don't see why it would be a dangerous precedent to increase funding to an educational establishment that is already state funded. Why do you think it would be a dangerous?

shewasrooting · 31/01/2024 17:45

@coffeeaddict77

Unless you are a legal expert in tax law how do you know exactly what they would have to do in court to charge VAT?

not even a tax expert would know. why? because it’s a daft hypothetical situation. They would look somewhat perplexed by the OP presenting this theory to them

Thesmokinggnu · 31/01/2024 17:44

Unfortunately you are only being hailed by starmers dog whistle, and doing so without the facts.

Starmer himself benefited from a free education at a private school through its charitable status. He then plans to pull up the ladder behind him. Just like the labour politicians that closed the free grammar schools.

coffeeaddict77 · 31/01/2024 17:41

AgathaCrispee · 31/01/2024 17:10

Well, not really.

As I said up thread, ISC will probably bring a legal challenge and I suspect it will be the 'all educational institutions or none' argument, its unfair to discriminate.

The government will then have to justify legally why its singling out private schools and why that is in the interests of the tax payer. They will need to demonstrate the amount of revenue it generates vs how much it costs to administer/unintended costs (increase in HMRC processing costs and legal fees, increase in requirement for state school places as private schools close, loss of other forms of revenue collected via private schools that no longer operate and so on).

The government may well lose the legal challenge, in which case the court could find that there is no longer an educational exemption for all education and training and it should be applied equitably. Or it could find that the government has no legal basis to discriminate and the case is won by ISC.

A Labour government could be forced to climb down on this issue having incurred more costs to the tax payer.

Unless you are a legal expert in tax law how do you know exactly what they would have to do in court to charge VAT? Do courts decide what is in the interest of the tax payer? I doubt a government has to "justify legally" why it is singling out private schools versus government funded education including universities but even if it did and the court decided they should all be treated the same what difference would it make to state funded institutions overall? They could just increase government contributions so any VAT charged was effectively refunded.

The potential for having to increase state funded schools if private ones subsequently closed is certainly an issue. However, I think there is an argument for a low amount of VAT e.g. 5% to maybe increase gradually.

Jovacknockowitch · 31/01/2024 17:32

I started this thread looking at how universities could be dragged in but its also highlighted a load more concerns for me as others have posted.

Is the hamsters now your major concern?

shewasrooting · 31/01/2024 17:26

is there a point in the future OP that you would accept that this is not going to happen? Labour’s winning speech? 6 months after? a year? 3 years?

cyclamenqueen · 31/01/2024 17:22

coffeeaddict77 · 31/01/2024 16:58

But if the school is giving the government money via VAT the money can be given back via funded places. It will make no difference.

But it’s not hypothecated even the Labour Party have not said that the tax will be kept separate . It’s highly unlikely that the government will increase the funding to the MDS to cover the extra cost . This would set a very dangerous precedent from their point of view.

AgathaCrispee · 31/01/2024 17:10

coffeeaddict77 · 31/01/2024 16:56

Of course it would have to be done carefully but that doesn't mean that it can't be done and it certainly doesn't mean that universities or students will loose financially if it isn't which is what your thread is about.

Well, not really.

As I said up thread, ISC will probably bring a legal challenge and I suspect it will be the 'all educational institutions or none' argument, its unfair to discriminate.

The government will then have to justify legally why its singling out private schools and why that is in the interests of the tax payer. They will need to demonstrate the amount of revenue it generates vs how much it costs to administer/unintended costs (increase in HMRC processing costs and legal fees, increase in requirement for state school places as private schools close, loss of other forms of revenue collected via private schools that no longer operate and so on).

The government may well lose the legal challenge, in which case the court could find that there is no longer an educational exemption for all education and training and it should be applied equitably. Or it could find that the government has no legal basis to discriminate and the case is won by ISC.

A Labour government could be forced to climb down on this issue having incurred more costs to the tax payer.

OP posts:
coffeeaddict77 · 31/01/2024 16:58

cyclamenqueen · 31/01/2024 16:50

It doesn’t matter who pays the fees , the schools will have to charge VAT to the end payer in this case the MDS . This means the number of funded places will be reduced with a knock on effect for the schools .

But if the school is giving the government money via VAT the money can be given back via funded places. It will make no difference.

Dibblydoodahdah · 31/01/2024 16:57

Ohdeardddddeardear · 31/01/2024 16:05

This

Goodness me, not another one. It’s absolutely not that. Charitable status and VAT exemption are two completely different things. Some private schools are charities, some are not. None of them charge VAT at the moment because education is exempt from VAT. This exemption applies to both school and universities.

And some universities are charities.

coffeeaddict77 · 31/01/2024 16:56

AgathaCrispee · 31/01/2024 16:44

Of course it can be done, as the tax advisers on this thread have said. They will change the VAT rules. But the fallout from that could backfire in multiple ways if not carefully considered.

I started this thread looking at how universities could be dragged in but its also highlighted a load more concerns for me as others have posted.

Have a read of this interesting article from the Taxpayers Alliance. It raises a really interesting point about the inefficiency of the current VAT systems and how this change would create further issues:

https://www.taxpayersalliance.com/counting_the_costs_of_labour_s_private_school_vat_plans

Of course it would have to be done carefully but that doesn't mean that it can't be done and it certainly doesn't mean that universities or students will loose financially if it isn't which is what your thread is about.