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

[AgathaCrispee]

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!!

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.

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.

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

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

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

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.

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.

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.

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.

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.

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

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)

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 .

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.

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.

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.

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.

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.

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.

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?

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?

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.

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

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

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?