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

This makes no sense at all. Firstly, universities would not benefit in any way. Secondly, fees are capped at what loans are available for to make education available to all.

This is not in any way comparable to raising money by taxing unnecessary luxuries like private schools. The entire country benefits from people being university educated.

The entire country is disadvantaged by people being privately educated.

This makes no sense at all.
Why does it matter if some Universities close and some reduce course options? There are too many places and too many young people studying degrees which are of very limited benefit to them.

How would adding VAT help the universities ? - The university have to pay it to HMRC , any business / institution collecting VAT has to pay it across to HMRC they don’t keep it for their own use / cashflow

@JasmineTea11 you don't even need A levels to join the police - a friend joined in 2020 with NVQs in ... beauty tech. She's now a mounted Police Officer in London.
Also now they've increased the repayment period to 40 years and reduced the level in which it is started to be paid back it is predicted over 60% will repay the loan in full, with interest. Increase the fees if need be, but don't tax it.

How is the "entire country disadvantaged by private schools"?

PPE, History, Theology, Golf Courses, etc seem to be luxuries compared to driving schools which are VATed. Accountancy Training is VATed, Electrical/Plumbing/Carpentry training at private colleges are VATed, Foreign Language Courses at private centres are VATed.

I don't see why universities should have any special position compared other optional higher education institutions.

Attending university is an option. If someone goes to a private trade school to learn plumbing they have to pay VAT - why should history not be VATed when plumbing or lorry driver training is VATed? This is just a middle class privilege paid for by the working class.

Universities should definitely be paying VAT now. Why should graduates have special privileges and be able to avoid VAT when essential trades like lorry driving have to pay VAT on training?

Isnt there a moral argument that universities should pay VAT like many other education providers?

The impact of Brexit is the elephant in the room here.

This is just another school vat thread. OP you will be paying vat. Get over it.

when plumbing or lorry driver training is VATed?

Are they? Are you sure?

And I wish we could blame Brexit, but no, the impact of Brexit on uni finances, while it's had an impact, it has not been the single most damaging issue.

I think it's pretty clear that the only reason why the OP is suggesting this policy is because she is feeling bitter and petulant about having to pay VAT on private school fees, and she is desperate for everyone else to suffer as a result.

@MrsBennetsPoorNerves what a spiteful comment.

Would closing failing universities risk further disenfranchising certain locations in the UK? Where there aren’t a multiple of university choices?

First sensible question you've asked all thread.

https://www.bbc.co.uk/news/articles/cv22y7zl18po

@Aligirlbear

"How would adding VAT help the universities ? - The university have to pay it to HMRC , any business / institution collecting VAT has to pay it across to HMRC they don’t keep it for their own use / cashflow"

You are of course correct that the money would go to HMRC.
However if we agree that many universities are struggling financially especially with the reduction in overseas students and Government finances are not available to bail out the universities.

So additional funding has to come from somewhere and raising tuition fees would be hugely unpopular. So how about VAT is introduced on university tuition fees, HMRC get the money then UK Government sends back the money to the universities perhaps with more sent to those courses the Government wishes to encourage

It would be cheaper and less complicated to raise tuition fees in the first place.

exactly. Private schools are a totally unnecessary luxury which are a drain on the rest of the country.

Private schools need to be paying VAT. Private schools are going to be paying VAT. It should have happened decades ago.

https://hgvtrainingprices.org.uk/hgv-training-london/

https://www.ableskills.co.uk/plumbing-courses/

See VAT on fees. Unfair that universities don't have to charge it.

You say no one would suffer by bat on tuition fees, well what about the students who have to pay it?

Why should they free ride on plumbers, HGV drivers and those who don't go to university but have to pay VAT on education?

Why would you look to the bottom of the list though? The Times University Ranking’s top 20 has no former polytechnics. Any university under the top 30 is a waste of your money now that fees have increased. If someone can’t get into a top 30, maybe uni isn’t for them.

Tuition fees make up a large part of universities income. Universities are suffering financially as that income has been frozen for many many years as inflation (and wage demands) have surged. Adding VAT obviously won’t help the situation.

Do we think those who will pay the VAT could and should pay more? A more clear cut question when posed of private school parents than students perhaps.

They are not a drain on the rest of the country. They save the taxpayer money which is why this VAT policy is unlikely to generate much income and may end up costing more than it makes due to private school pupils transferring to the state sector.

It matters because of the devastation that would be caused to some more deprived towns if they were to close. Local students use my local university.

We heavily rely on international students.
Buildings created for the university. What would happen to them.

But many universities will close. Many are in dire financial straits already and Phillipson has already stated that there will be no government support for them.

Please can you show me the data that proves private schools are a drain on the country?
Private schools save the state £4 billion per year, they pay VAT on all purchases but currently can't claim it back and are large employers in local economies.
On no metrics are private schools a drain on the economy/country, or are you just parroting something you've heard?

Also it won't be the schools paying VAT, it will be the parents. Who are already tax payers, many higher rate tax payers so already contributing most than most to the economy.

moving My child from state to private has removed the cost of educating them from the state. And removed my child from the CAMHS waiting list. And freed up the school from the challenge of meeting their ASD needs, and protecting them from bullies, and freed up the school community policy officer from charging their bullies with assault endlessly. This is the difference a well funded, well resourced school can make to a child. Remind me, in which way are the private schools a drain on society?

UK has some of the highest tuition fees in the world (for its own citizens)

Almost all of Europe offers its children, either v cheap fees or non at all, then there is the extortionate interest rates and lower loan repayment thresholds.

Why are our children seen as cash cows, providing the skills our hospitals, schools and business need to run a successful skilled economy.

The percentage of UK students who go to Uni is on par with that of most EU economies.