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!!

Yet another thread where people have to explain the facts.

Private schools are exempt from VAT under the VAT legislation. It’s in the same part of the legislation that universities fall under and mean they are also exempt.

The charitable status is entirely separate. Around half of private schools are not charities now and are not liable to VAT.

It doesn't matter whether they go full time or part time. Without universities degree apprenticeships would not exist.

@coffeeaddict77. The employer pays the uni fees and the student, so no debt. In many cases, uni contact is one day a week max and done remotely. The cost to the uni is minimal and to the student.

My son’s friend has a guaranteed job on completion and not dependent on grade. He’s been able to demonstrate his fit for the business and work ethic.

He’s not a first class honours student. However, he has been able to demonstrate he is a first class honours employee.

This said, it was the privilege of his private education that ensured he had the extra curricular that secured him his degree apprenticeship in the first place. Without this, he would be in a huge pool of potentially 2:2 students, seeking out the same jobs while saddled with huge debt.

Privilege still goes to privilege and I’m acutely aware of this. I don’t feel guilty, because my financial circumstances are what they are and with just one child, it stretches further, but I am fully aware that my son has huge advantages over children who are naturally more academic and work harder, but have had no leg ups.

The proposal is to remove the spurious charitable status of private schools

This is incorrect. The Labour Party has already said they’ve backed down on plans to strip schools of charitable status.

The plan is to change the VAT legislation. That legislation exempts private schools. The same part of the legislation also exempts universities.

Actually they don't need universities. An ITP could deliver up to Level 7 which is an undergraduate degree. It already happens in other sectors. So you could cut out university completely and still get a degree.

Private schools should not be classed as charities.

Around half of them don’t have charitable status. The Labour Party have already said they are not going to strip those that do of their charitable status.

They are planning to change the VAT legislation, the same legislation which covers universities.

Actually they don't need universities. An ITP could deliver up to Level 7 which is an undergraduate degree. It already happens in other sectors. So you could cut out university completely and still get a degree.

Who would validate the degree?
Level 7 is a postgraduate qualification.....

@PremiumRaa. you said it. Able to pay for them. If this isn’t a perk of the privileged, what it it? I’m intrigued to know.

The End Point Assessment Organisation. Sorry yes L7 is post grad!

The cost to the uni is minimal

Not true. The cost of running an apprenticeship at a university is not minimal.
It's a lots of additional work and bureaucracy compared to a standard degree and can be resource heavy.

This is interesting. What makes a business BAT exempt? I’m not being facetious. I’m genuinely interested.

Just pay the VAT and stop scare mongering. They won't put VAT on university fees, it is only private school fees impacted.

I didn’t realise this. Thank you.

The End Point Assessment Organisation.

Then you need them to be completely overhauled as the end point assessor currently has to be independent from the awarding institution.

Many organisations completing the end point assessment are not in a position to validate degree programmes.

He’s not a first class honours student. However, he has been able to demonstrate he is a first class honours employee.

That's a really great statement!

Yes, given the utter state this country is in, from the CoL crisis and crumbling infrastructure to the recruitment / retention crises in vital public services and the complete erosion of any trust in authority, a discussion on a fictional policy of the opposition is certain what's needed.

I've emailed the NUS, I'll let you know what their take on this is.

Suspect they'll have been considering this too.

I emailed my local Labour MP to ask about VAT on school fees - I got a quick response to say I need to wait to see what's in the manifesto. So no point in speculating til it comes out.

I dont think that the Labour Government if elected would do this.

I do think it sets in motion the idea that education is a vatable thing and there is a chance that the next government would look to extend the principle.

This question has been raised before and, yes, it does concern me.

Just to clear up the facts first, which so many people with such strong views seem to be unaware of. As things currently stand, only around half of private schools have charitable status. Even those that don’t have charitable status do not have to charge VAT on fees because of an exemption under the VAT legislation.

The Labour Party have said that they are no longer planning to strip schools of charitable status. What they are planning to do is to change the VAT legislation.

For the sake of clarity, this is from the government website.

“If school, higher or further education is being provided for a charge (see paragraph 3.1), the VAT consequences are for an eligible body (see section 4):

• the education provided is exempt
• any ‘closely-related’ goods or services provided are exempt”

“With effect from 1 August 2019, an eligible body is:

• a school, sixth form college, tertiary college or further education college or other centrally funded further education institution (defined as such under the Education Acts)
• a centrally funded higher education institution in Wales, Scotland and Northern Ireland (defined as such under the Education Acts)
• the governing body of one of these institutions:
• a local authority
• a government department or executive agency
• a non-profit making body that carries out duties of an essentially public nature similar to those carried out by a LA or government department
• health authority
• a non-profit making organisation that meets certain conditions
• a commercial provider of tuition in EFL, in which case special rules will apply (see section 9)
• a university
• a higher education provider registered in the approved (fee cap) category of the register maintained by the Office for Students from the date of inclusion in the register”

The VAT exemption for fee paying schools is under the same part of the rules as universities are.

In theory, they might be able to change the legislation to try to ensure that only schools are covered. In reality, trying to change legislation without having unintended consequences can prove challenging.

The Labour Party’s two main policies of raising tax are taxing private schools and non doms. There is no way that even the most optimistic person can think that these changes alone will raise enough to cover any meaningful increase in spending in other areas. The money needs to come somewhere.

Where is the money for all this spending coming from? My concern is that once they tweak the VAT legislation, they’ll look at other tweaks. University fees, care homes, private nurseries, healthcare etc. - all of these are things which many of the population cannot afford and, therefore, could be seen as “luxuries”.

Would the Labour Party admit to looking at any of these things before an election? No, of course they won’t, because it would lose them votes.

Charities have to be registered and charge VAT on "Business activity" so many charities will have the shops registered for VAT under a separate trading entity or will be partially registered for VAT . I assume they will just change the definition of "business activities" so that it catches private education.

All Charities (unless partially registered) have to pay VAT on their inputs (if vatable) and they can't reclaim the VAT.

Geeky government types love drafting tax rules - I'm not aware of any plan to include public universities within the remit though private universities might be caught.

I hope not it would be incredibly stupid

Even more so than the current gimmick for non university

Those Labour bastards are going to make organisations BAT exempt? The evil fuckers!
Where the hell is the Daily Mail when you need it?

What’s the percentage split on public v private?

I hadn’t given any thought to what is what

For all it matters at this point, uni fees could be 9k or 50k. VAT or no VAT. The loan covers it and it is only paid back as a % of income until it’s written off after a few years. I couldn’t get wound up about it, let alone use it as an argument for private schools.