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

Look, even the lowest of right wing hacks would struggle to get a piece published suggesting VAT on school fees will lead to VAT on university fees.

On the other hand, they would stand a decent chance with a piece about how concerned people are about VAT school fees leading to VAT on university fees, as evidenced by this thread.

Just saying.

This place is completely mad sometimes. Good grief.

There’s a poster scared this thread will make people think it’ll happen scroll back about five minutes

I couldn’t agree more. The Labour Party started off a few years ago voting to abolish private schools altogether, and acquiring the infrastructure for the state. They abandoned that plan as they clearly hadn’t thought it through (despite getting as far as voting for it at conference).

Then they told everyone that they would abolish charitable status to solve the tax issue. Despite lots of people telling them that not all schools were charities and that the VAT issue was separate, they continued with this plan. It’s only relatively recently that they seem to have realised that plan wasn’t workable, and wouldn’t achieve the desired consequences anyway, and now they’ve abandoned it.

They are now saying they’re going to change the VAT legislation. Given the previous plans weren’t thought through and that even the most basics of VAT law weren’t understood, are we really supposed to have confidence in this latest plan working? Do people honestly think that they’ve thought all the different scenarios through and that there won’t be unintended consequences?

The Labour Party are tying themselves in knots over a policy which will raise a relatively tiny amount of revenue, even using the most optimistic estimates. It’s ridiculous and not properly thought out. A total shambles.

What?

“And you've hit the nail on the head, the fact that £9250 annual tuition per domestic student isn't covering the course cost and fees cap will have to rise one way or another;all well & good to be outraged at foreign students taking larger % of places but they pay domestics fees x3”

Well most EU countries decide to fund tertiary education properly on behalf of their own students because they take a long term view on productivity. However, clearly we are loving going more and more US style in all respects.

Happy to clarify that I am not worried about VAT on university fees. Absolutely bananas that telling people there’s nothing to support their hare brained ideas is actually in fact more evidence that it’s going to happen.

The fee cap is going to increase. This nonsense thread about whether or not they’re going to accidentally put VAT on university fees because they didn’t read the small print is just a distraction.

People should air their opinions on Mumsnet because it represents a slice of history. I enjoy reading some of the old threads and there is a distinct “I told you so” vibe I get from some of them. This is a democracy. There are plenty of people on these threads that are not partisan. Those who want to shut them up are clearly worried about this policy themselves because typing its flaws out is what scares them the most.

Feel free to let the delete it now pp know they’re worrying about nothing

And you've hit the nail on the head, the fact that £9250 annual tuition per domestic student isn't covering the course cost and fees cap will have to rise one way or another;all well & good to be outraged at foreign students taking larger % of places but they pay domestics fees x3

I agree that these VAT on private school threads are going like the Brexit and Covid threads…

But what did we learn from those?

That makes no sense at all.

I mean sure, but that wouldn’t be very smart because right now it’s only a few deranged people on Mumsnet who believe this is even remotely likely.

The whole thread is completely doolally. Charitable status is a total red herring.

As a fellow lawyer, I was surprised that it took Starmer so long to work out that ending charitable status would be problematic. It certainly didn’t instil any confidence in me voting for him.

Our Government is losing money on student loans at worrying rates and they are therefore incentivised to deter many from going uni.

They will increasingly try and put higher education costs onto employers.

.

@MyOrganisationIsCaptured don’t worry about it it’s a frustrating policy

Admittedly we haven’t seen any manifesto yet, but I do think it’s a genuine question to ask where all the funding is coming from to finance all the spending plans. At the moment, we are being told that taxing private schools and non doms is the answer to all the country’s woes. It really isn’t. To increase spending on state services to any meaningful level will involve decreased spending elsewhere, borrowing more, or raising taxes (be that income tax, national insurance, VAT etc).

If the Labour Party are planning to abandon the longstanding VAT education exemption, and thus going against EU law, it’s a valid question to ask what else they might do.

On the subject of uni loans this is pertinent reading https://ifs.org.uk/publications/higher-long-term-interest-rates-and-cost-student-loans#:~:text=The%20spread%20between%20the%20government%27s,graduates%20who%20repay%20in%20full.

1. The cost of government borrowing as measured by the 15-year gilt yield has risen from 1.2% to 4.0% over the past two years. Relative to expected RPI inflation, this is a 3 percentage point increase. As the interest rate on student loans is now the rate of RPI inflation, this means that the government can expect to pay 1.6 percentage points more in interest on its debt than the interest rate it charges on student loans. Two years ago, just before the most recent student loans reform, it could expect to pay 1.4 percentage points less than the rate of RPI inflation.
2. This increase in government borrowing costs translates to an increase in the expected cost of student loans including financing costs of more than £10 billion per year. With borrowing costs as at the end of 2021, the government could have expected to earn a total net profit of £3.2 billion on student loans to the 2023 university entry cohort, arising from the positive spread between the interest it charged on student loans and the interest it paid on its debt. With today’s borrowing costs, this interest rate spread is negative, and the government can expect to make a loss of £7.3 billion.
3. Concerningly, this extra cost is not reflected in either of the government’s official measures of the cost of student loans. The ONS measure does not take the cost of government borrowing into account at all. The DfE measure that underlies the so-called RAB charge uses a backward-looking measure of borrowing costs, which does not yet capture the sharp rise in gilt yields over the last two years.

@Lindaofoxford I don't remember that, what friend?

As for the MN community helping me, LOL

I suppose I'll change my name again then, ho hum

Yes it’s not well known

In everyone’s defence even Starmer got it wrong and decided against ending charitable status

It doesn’t need to be deleted, the opposite it needs to be clarified and talked about

The fact that so many people on this thread don’t understand that VAT and charitable status are two separate things and that you can have one without the other shows why we need to have these threads. It’s quite worrying that there are people wanting the thread to be deleted.

Even if they added VAT it doesn't mean student tuition fees would have to increase. The government contributes to fees anyway so they could just contribute more to make up for the VAT charge. It would all be a bit pointless to charge money and then give it back though which is one of the reasons it won't happen.