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Original poster

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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18
Hercisback · 31/01/2024 16:52

I teach in state and my kids go state. I'm not a huge fan of private schools but they provide a service and in some cases are the only suitable places for children EHCPs because state is so underfunded.
I worry about what will happen to these children when private schools have to close because of the VAT.

The potential money raised by this policy is approx 1% of government education funding. What difference do people really think this will make If they even give the money to state? It would barely fund the children leaving the private sector.

It's a headline grabbing bollox policy just like the brexit bus.

cyclamenqueen · 31/01/2024 16:50

aitchteeaitch · 31/01/2024 16:30

Most Royal Ballet School students are funded by the government MDS scheme, only a few pay. Overseas students pay full fees though, and at upper school level, that would be the majority of them.

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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 .

cyclamenqueen · 31/01/2024 16:46

Ohdeardddddeardear · 31/01/2024 16:05

This

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Universities do have charitable status . But that doesn’t matter anyway , ‘education’ is currently an exempt supply regardless of who makes that supply . You can be slam Sufar supplying education or Oxfam or the University of wherever or St whatever’s independent school ; you do not charge VAT because education is an exempt supply .

( Only about 60% of independent schools are charities anyway)

Original poster
AgathaCrispee · 31/01/2024 16:44

coffeeaddict77 · 31/01/2024 16:35

So you want them to explain how they would do it "correctly" ? Have any actual legal experts said that it can't be done with causing chaos or that the tax payer would lose more than they would gain? There are tax advisors on this thread who have said it can be done.

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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

Counting the costs of Labour’s private school VAT plans

Adding VAT to private schools, however well it may play with some voters, would not be a smart policy move. The issue as a whole is a microcosm of the flaws in the UK’s over-complicated tax system. The proposal should hopefully give policymakers a chan...

https://www.taxpayersalliance.com/counting_the_costs_of_labour_s_private_school_vat_plans

OP posts:
dodobookends · 31/01/2024 16:43

Araminta1003 · 31/01/2024 13:36

@Fleeceflop - is it a simple change of wording in a VAT Notice to capture private schools only or will it require new legislation? Can specialist music and ballet schools be easily excluded? Is it easy to exclude SEN schools? (Thinking especially of those with part local authority and part private funding)

Places at specialist elite music and dance schools are mostly government-backed anyway, so there would be no point in charging vat. Most are charities, and also get funding from philanthropists, charitable foundations and trusts.

Unlike most private education, you can't just choose to send your child to that sort of school because you are rich and can pay for it. You have to be exceptionally talented to get in.

coffeeaddict77 · 31/01/2024 16:43

AgathaCrispee · 31/01/2024 16:32

That's exactly what I would expect, tbh.

ISC may well present the 'all educational institutions or none' argument, forcing the government to explain why it was excluding private schools from the exemption. Not sure whether the privilege argument would stand up to legal scrutiny there.

They can write the VAT rules however they want, but they can be legally challenged.

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So what if they argued that? Universities receive government funding anyway so they could just give any VAT that had been charged back. A waste of time but it wouldn't impact students or universities financially.

coffeeaddict77 · 31/01/2024 16:35

AgathaCrispee · 31/01/2024 16:21

Incorrectly including or excluding institutions in VAT collection, leading to financial stress whilst legal cases are brought. Many would raise appeals through HMRC which have to go to mediation and tribunal, which will cost the tax payer money.

Legal challenges from ISC, which could cause the debate of inclusions or exclusion of all forms of education without discrimination. This could tie up court time for a prolonged period, the tax payer would foot this bill.

I was looking at this from a university perspective, but as other posters have pointed out, the potential loss of jobs of teaching and support staff in educational settings whilst cases are appealed. I hadn't considered this aspect but that could be a consequence.

These are just a few I can think of.

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So you want them to explain how they would do it "correctly" ? Have any actual legal experts said that it can't be done with causing chaos or that the tax payer would lose more than they would gain? There are tax advisors on this thread who have said it can be done.

Original poster
AgathaCrispee · 31/01/2024 16:32

twistyizzy · 31/01/2024 16:25

ISC and others are definitely campaigning and I would suspect any legal challenge to come from them on behalf of all member schools.

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That's exactly what I would expect, tbh.

ISC may well present the 'all educational institutions or none' argument, forcing the government to explain why it was excluding private schools from the exemption. Not sure whether the privilege argument would stand up to legal scrutiny there.

They can write the VAT rules however they want, but they can be legally challenged.

OP posts:
aitchteeaitch · 31/01/2024 16:30

Araminta1003 · 31/01/2024 14:36

@Fleeceflop - my apologies, I wasn’t very clear. I meant the Royal Ballet School, Purcell’s, Chatham- specialist schools of that ilk where some parents pay the full fees but many do not or have free places.

Most Royal Ballet School students are funded by the government MDS scheme, only a few pay. Overseas students pay full fees though, and at upper school level, that would be the majority of them.

twistyizzy · 31/01/2024 16:25

AgathaCrispee · 31/01/2024 16:21

Incorrectly including or excluding institutions in VAT collection, leading to financial stress whilst legal cases are brought. Many would raise appeals through HMRC which have to go to mediation and tribunal, which will cost the tax payer money.

Legal challenges from ISC, which could cause the debate of inclusions or exclusion of all forms of education without discrimination. This could tie up court time for a prolonged period, the tax payer would foot this bill.

I was looking at this from a university perspective, but as other posters have pointed out, the potential loss of jobs of teaching and support staff in educational settings whilst cases are appealed. I hadn't considered this aspect but that could be a consequence.

These are just a few I can think of.

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ISC and others are definitely campaigning and I would suspect any legal challenge to come from them on behalf of all member schools.

luckylavender · 31/01/2024 16:24

@AgathaCrispee/ I was talking about Universities. They're serious about private schools.

shewasrooting · 31/01/2024 16:23

I take it that you didn’t have much on today OP? 😂

Original poster
AgathaCrispee · 31/01/2024 16:21

coffeeaddict77 · 31/01/2024 16:11

What sort of chaos and who would be effected?

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Incorrectly including or excluding institutions in VAT collection, leading to financial stress whilst legal cases are brought. Many would raise appeals through HMRC which have to go to mediation and tribunal, which will cost the tax payer money.

Legal challenges from ISC, which could cause the debate of inclusions or exclusion of all forms of education without discrimination. This could tie up court time for a prolonged period, the tax payer would foot this bill.

I was looking at this from a university perspective, but as other posters have pointed out, the potential loss of jobs of teaching and support staff in educational settings whilst cases are appealed. I hadn't considered this aspect but that could be a consequence.

These are just a few I can think of.

OP posts:
Another76543 · 31/01/2024 16:17

Ohdeardddddeardear · 31/01/2024 16:05

This

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As has already been pointed out, there are factual inaccuracies with this comment you’re agreeing with. All 3 of the ”facts” posted are incorrect.

Private schools currently have charitable status and so VAT exempt. Unis don’t. You are comparing apples with pears.

Half of private schools don’t have charitable status. They are VAT exempt because of VAT legislation; charitable status is irrelevant. Unis do have charitable status.

shewasrooting · 31/01/2024 16:12

This is politics and its important we don't just blindly accept sound bites without looking behind these statements.

nor do i blindly accept threads started by user name change / new OPs on a wholly unsourced issue

shewasrooting · 31/01/2024 16:11

AgathaCrispee · 31/01/2024 16:03

Because I knew some posters would go trolling through my posting history to pick me apart trying to point score and detract from the discussion.

Also I would be stalked by others whenever I posted on another thread and be accused of being a Tory activist.

Your post actually reinforces my thinking.

Hope that helps.

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i wonder what they’d find to “point score”! 😂

coffeeaddict77 · 31/01/2024 16:11

AgathaCrispee · 31/01/2024 15:36

Labour have put forward VAT on school fees as a stated policy. They now need to detail how they will achieve that by not causing chaos.

This is politics and its important we don't just blindly accept sound bites without looking behind these statements. We fell foul of that with Brexit and Covid, let's not repeat the same mistakes.

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What sort of chaos and who would be effected?

Ohdeardddddeardear · 31/01/2024 16:05

Lindaofoxford · 31/01/2024 08:08

Private schools currently have charitable status and so VAT exempt. Unis don’t. You are comparing apples with pears.

This

Original poster
AgathaCrispee · 31/01/2024 16:03

shewasrooting · 31/01/2024 15:57

an “important discussion”

but one that you didn’t want tied to your user name history

genuine question… why?

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Because I knew some posters would go trolling through my posting history to pick me apart trying to point score and detract from the discussion.

Also I would be stalked by others whenever I posted on another thread and be accused of being a Tory activist.

Your post actually reinforces my thinking.

Hope that helps.

OP posts:
shewasrooting · 31/01/2024 15:57

AgathaCrispee · 31/01/2024 11:09

Mumsnet HQ

Please can you confirm that I am a long term poster who has name changed.

I think we need to put the accusations that I'm a Tory activist to bed.

This is an important discussion that many people are interested in.

I've reported this post as well.

an “important discussion”

but one that you didn’t want tied to your user name history

genuine question… why?

randomchap · 31/01/2024 15:38

If people can't afford to send their kids to private school after VAT is added, then maybe they just need to tighten their belts. Stop having so much avocado on toast, takeaway coffees, and the latest iPhone.

Original poster
AgathaCrispee · 31/01/2024 15:36

luckylavender · 31/01/2024 15:17

@meditrina - let's focus on the politics and what a Labour government would want to acheive. Charging students more makes no sense.

Labour have put forward VAT on school fees as a stated policy. They now need to detail how they will achieve that by not causing chaos.

This is politics and its important we don't just blindly accept sound bites without looking behind these statements. We fell foul of that with Brexit and Covid, let's not repeat the same mistakes.

OP posts:
luckylavender · 31/01/2024 15:17

@meditrina - let's focus on the politics and what a Labour government would want to acheive. Charging students more makes no sense.

Araminta1003 · 31/01/2024 15:17

“Private schools do not charge VAT because at the moment education is an exempt service. It is not because the private school has charitable status.”

But for daycare centres whether they are charitable or not does affect their VAT treatment but only in England and Wales. Those constituted as charities do not pay the VAT under the applicable VAT legislation. Maybe there is an appeal to the Supreme Court.