UK universities in trouble - why not add VAT to tuition?

[80smonster]

UK universities are in trouble, apparently many could close, why not charge VAT on tuition fees (for those that are financially viable)? Bridget Phillipson says they are autonomous institutions and won’t be given a public bail out - they should rely on their own resources:
https://www.theguardian.com/education/article/2024/aug/09/english-universities-face-autumn-tipping-point-as-financial-crisis-looms

YABU - don’t add the VAT
YANBU - add the VAT

How would making universities tax collectors improve their viability?

You need to look at why they are in trouble. Admissions figures are falling...why would you put even more people off going?

You know the entity charging VAT doesn't get to keep it, right?
They collect it and pay it to the government.

There are no free state universities, so you can’t tax them like you tax private schools, which are a luxury (because the free state option exists).

If you charge vat then you pass it to the govt the university doesn’t keep the money , what would your point be ?

No harm done if a few ex-polytechnics close. Far too many universities selling worthless qualifications anyway.

VAT won’t increase revenues for the Universities. It will simply increase public debt to the private companies that the U.K. sells student loans to and make the country, and then universities worse off.

OP do you know where VAT goes? When your builder charges you VAT do you think he keeps it? Bless....

Is it such a bad thing if some close?

Education is exempt from VAT in the state sector .

Will it be those ones that close though? Those ‘worthless’ qualifications might well be quite cheap to run, compared to say, medicine, or veterinary science. But all charge the same fees.

I’m sorry but it is depressing that anybody could think taxation on fees would raise revenue for the university

Is the public really operating at this level of intelligence?

They are not a luxury, like private schools are

@Saggytoot The polytechnics offered degrees decades ago. They are not the lowest tier of unis. Look at the bottom of the league tables and they are not former polytechnics. I would look at research quality, entry requirements and whether students are getting graduate jobs. If not, revert to being colleges of Higher Education and concentrate on skills employers need. We have lost a flourishing middle sector for training and it needs to be reinstated.

As for VAT? Why would unis collect vat? Fees need to rise but the unis need that money.

I assume the OP is trying to make a point about levying VAT on private school fees by saying universities should levy VAT as well.

As several posters have pointed out, VAT is a tax and is paid to the government by the collecting entity. The university would not keep any of the money.

So unless your proposal is that they charge VAT, hand it to the government and then the government pays it back to the universities, then charging VAT on uni fees would not increase revenues for universities. All the VAT goes to government.

If you do propose that the government then pays the VAT back to the universities, it would be much more efficient to raise fees by 20pc rather than go through a process of paying it back and forth.

But also universities are regulated in terms of the fees they charge and there is no state provided free option so consequently they aren't considered a luxury good, like private primary and secondary education is.

Some universities are struggling because they followed government encouragement to increase enrollment of international students, who pay higher fees and subsidise domestic students. Now they have deterred international students through the visa rules and work after graduation rules, the universities which expanded expecting those students are now struggling.
They did it because the government encouraged it through the way higher education is funded. They were responding to the incentives provided to have more international students and now they cannot.

....and no matter how much money you spend to get your kids into a 'good Uni' via the soon-to-be VAT included private sector... you will still be in the state sector for university.. (unless you go to one of the 5 highly unregarded private ones)

I think tuition fees will have to increase, certainly judging by Phillipson’s comments - why not add VAT as well as raising the fees? This would be of benefit to the treasury, for whom HMRC collect tax on behalf of, so would be an overall a win for everyone? Better funded universities, fewer failing unis/courses?

Op. You do know that a business who is VAT registered don't get to keep all that vat don't you?

Why not do both? Raise fees and charge VAT too? Surely a win for the treasury and for unis?

Universities are in the shit mainly due to admissions numbers - what makes you think adding an additional 20% onto tuition fees is going to help? 9k up to £10800. Aye that’s going to make it a more attractive prospect.

You know universities train nurses, police officers, social workers, teachers etc all of which we need more of?
And don't you want higher education places available for people in your area who can't afford / dont want to live away?
Sorry OP but you don't seem to know much about what they do.

Sorry to be clear. Unis would collect vat for the government. Fees would be higher with no benefit to the uni. If fees rise, as they should, the uni needs to keep all the money. To allow that to happen some unis need to close so students believe they are getting value for money with a career afterwards that pays more than not going to uni.

I’m sure they could arrange a recharge.

Not really, because the VAT will be funded by high interest student loans, which ultimately means the Gov will be taking on higher public debt that it will have to pay off after 40yrs of compounding interest - minus the payments from the student.

Sure, it is more money now, but the next generation of taxpayers will have to pay for it.

It'll just make degree level education seem even more unobtainable for lower income households. The VAT will just get added to the student loan regardless.