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!!

The VAT policy is simply not worth it if they are backtracking on everything else to appear centrist anyway. Because if they have a policy like this that doesn’t stack up to the rational lawyer accountant type brain, then they can’t sell the impression that they are the rational party of the centre aka let the grown ups take charge to sort the Tory mess (bye bye Buffoon Boris and clutching at straws Rishi, make way for lawyer Starmer and rational Reeves). And that is exactly what they are selling, they also cannot be seen to be harming any children post Covid or any teachers really. And there are a fair amount of those in the private sector especially with milder SEN. The stats are there.

Correct. Private schools currently pay VAT on purchases, and they cannot reclaim it (unlike state schools). This is because education is VAT exempt rather than zero-rated.

If they become VAT registered, they will be able to reclaim the VAT. I don’t think the implications of this have been properly understood. The irony is that the wealthier schools have a higher proportion of capital expenditure so will be able to claim more back than the smaller, cheaper schools.

Tory Shitstirring

you cant compare this to Vat on university, private schools are a perk for the wealthy yet university needs to be available to all.

Because at present, the EU stance on "no tax on education" applies to fees for schools, nurseries and universities. Once you remove that principle, then it becomes possible to tax all of them, but the current proposal seems to be for it to be only on the years attended by pupils of CSA plus Sixth Forms.

Always remember as well that despite its name, VAT is a general sales tax. It's not a luxury tax.

I don't think there is any political will to tax fees other than school fees, but precise definitions and T&Cs of new arrangements have not yet been published

If they go ahead with this VAT on education but limited to private schools does that mean we cannot join the EEA like eg Norway? But we could still have bilateral treaties in theory like Switzerland with the EU but we know the EU won’t allow another Switzerland?

Schools that serve the wealthiest like Eton or Marlborough won’t be impacted by this at all. It is definitely going to be the smaller schools with mostly day pupils that generally serve the middle class and a lot of SEND children will be pummelled.

Schools that serve the squeezed middle are likely to have 80% or more of their costs being staff. They can’t reclaim input tax on that.

Food won’t be recoverable, as it doesn’t tend to be “luxury” ingredients.

Then we need to think about international competitiveness, lots of international students could go elsewhere. You would be surprised at how many international diplomats and politicians have their kids educated in the UK. This is soft power we could loose if we get too expensive.

To be honest, I think that once we have VAT on private schools, we should introduce that at Universities as well. It is only just above 38% of the population who goes to university and it can be argued that this is choice to do so - not everyone is able to make that choice.

Universities are underfunded anyway and I think that they will need the money tbh.

Universities are underfunded anyway and I think that they will need the money tbh.

You do know that VAT goes direct to the Gov yes? Universities would never see it. In fact they wouldn't even collect it - the Gov would give it to the SLC, then take it back again - so a pointless exercise.

Well, I assume the VAT from the private schools go to the Gov as well? But they have said the proceeds would all go to state school?

Then they can do the same for universities. People who can afford university will pay a bit more and the universities will get money from the government.

Then they may as well simply allow unis to increase the UG fees. As if VAT would ever be ring-fenced!

As if VAT would ever be ring-fenced

but why would it not be ring fenced? The VAT on private schools will be.

it could also be a way to enable the government to direct the money specific universities / courses. If fees just were to rise that would not be possible.

Labour has specifically said that the money will not be ring fenced .

This is partly because we do not have a hypothecated tax tradition in this country and partly because it allows them ( and every other government) to fudge tax revenues. So far in their plans they have spent the paltry amount of revenue that this will raise ( less than 1% of the education budget on their own figures ) about 3 times over .

Yes we can. So are universities. No they don’t.

It would be entirely reasonable one the logic going on these sorts of threads to require the students, who are going to benefit from their degrees by a significant margin. to pay more.

Once they remove the sacred status of education and apply VAT, we will all see just how fast the arguments for protecting other aspects of education from the governments grasping fingers will fall.

Will VAT on school fees make the country more productive? Are private schools full of SAHMs with banker husbands who do tennis luncheons or do they actually help many women work? It is questions like this that need answering. As well as how much employment do private schools really create? Not just staff but also in the building and gardening etc trade. It would be good to see some actual numbers.

If you believe that you're ridiculously naive.

I'm amazed that even 19 pages into this thread there were still posters insistent that VAT and charitable status are connected. To be honest though, the general population are woefully ignorant about taxation. In a discussion about a vote on a pay offer one of my colleagues genuniely believed that once you hit the 40p threshold ALL of your income would be taxed at that rate, not just income above the threshold. I also had to point out that thresholds are based on the income left after pension contributions have been deducted so those who work a lot of overtime and don't want to pay 40% on that can just pay AVCs.

No it won’t be. You are deluded if you think it will. Are you still waiting patiently for the Brexit money for the NHS? In any event, it’s only going to generate a tiny amount compared to the education budget. All the figures quoted by Labour so far are wrong.

Well, Labour has suggested the VAT specifically to help state schools. They have said this a lot.

Therefore it should be possible to add VAT on university fees to be able to support some universities.

I actually think it should be VAT on tutoring as well. A lot of people cannot afford tutoring, nobody on a minimum cafe can. Why should some people be able to buy an advantage? If you are able to pay for university/ tutoring, you are able to pay the extra VAT.

VAT won't apply to private tutors if they are small businesses anyway. I think the threshold is 85k.

Education as a whole is VAT exempt.
A school's status as a charity has nothing to do with it. Schools still pay vat on their purchases whether or not they are a charity. No vat is applied on education services whether or not the supplier is a charity. You are posting ignorant misinformation.

I think the extra activities that wealthier people who use what they call "state plus" (send your kids to a naice leafy state comp, plug the gaps with lots of after school and holiday tuition and enrichment activities) will be the next target fot VAT rather than uni fees. Uni fees are an unlikely target unless they first abolish student loans.

@coffeeaddict77

maybe we should change the threshold? That must be easily done.

fundamentally, state education above a certain level (GCSE / A-Level) is free. Anything above that is something that only benefits less than half of the population.

Taxing private schools is a first step and we should extend this to all non-essential education.

Private tutoring is unfair and not attainable for a huge part of the population. It should be taxed. I am sure we can make a carve out. this will enable the government to direct this money (probably substantial) towards failing state education.

Universities are attended by less than half of the population and gives an advantage- of course it should be taxed - with VAT so the government can decide where they need to subsidise.

I'm sure it would be easy to change the threshold but this would effect every small businesses in the UK not just private tutors.

@MyBoiledEggIsTooSoft- are you double bluffing to get others to care about potential VAT on private schools?

Education although a big cost and a big business should never be taxed, out of principle. The profits of large private tutoring businesses are taxed anyway and so are those of private schools that are not charities. Those that are charities have to plough the money straight back into the schools and spending on the local economy anyway so the whole Vat on education policy stinks to the roof.

fundamentally, state education above a certain level (GCSE / A-Level) is free. Anything above that is something that only benefits less than half of the population

Any thing above that level only benefits half the population? Really - anything? The qualified doctor or nurse won't benefit anyone other than themselves? The teacher won't benefit anyone other than themselves? The engineer who designs roads? Etc etc.