Teenagers going to university in Britain could fall into a VAT trap due to Labour’s “rush” to introduce the sales tax on independent school fees, tax experts have told The National.
Vague wording of the current draft VAT legislation means that fees paid by those under the age of 19 could be liable for the charge, they say. All education in the UK is currently exempt from the 20 per cent sales tax. However, Labour wants to change that by adding VAT on fees paid to independent schools, from January 2025.
All other educational institutions, including nurseries and universities, are meant to be unaffected. But experts say the definition of a private school in the current draft legislation text leaves the possibility open that higher education students may also be liable for the charge.
Although VAT is technically a tax on the consumer, it is paid by businesses to the government, based on charges and fees received. It is unlikely that universities would be able to soak up the addition of VAT, given that 40 per cent face making a loss this year, according to estimates.
The draft legislation defines an independent school as a fee-paying “institution at which full-time education is provided for persons over compulsory school age but under 19 and which is principally concerned with providing education suitable to the requirements of such persons (for example, a sixth form college)”.
A spokesman for HM Treasury told The National the government “had no intention” of adding VAT to university fees. “University education is not captured by the draft legislation and we have no intention of bringing universities into VAT,” he said.
However, once the policy becomes law, it is up to the tax authority – HM Revenue and Customs – not the government, to interpret and enforce VAT legislation. Some have suggested that universities could be caught by the definition regardless, due to the fact that most students are 18 when they start.
“The [definition] on the face of it, unintentionally, would appear to catch universities and colleges which receive fees from students under the age of 19,” John Rainsford, VAT director at Evelyn Partners, told The National. The issue, a consequence of the government’s “rush” to introduce the tax, proves how difficult it is to introduce VAT legislation, he said.
“That’s why most governments do not change the VAT legislation, because it always comes up with these anomalies. It seems to be a consequence of the rush to get the legislation pushed through at a much, much earlier date than anyone had envisaged,” added Mr Rainsford. When the legislation is finalised on October 30, it must make absolutely clear that it does not include universities and further education colleges, he said. “You can’t have a mismatch,” he added.
The British Universities Finance Directors Group, which represents finance staff at 180 universities, has reportedly written to the Treasury to highlight its concerns. The warning comes following a call from British universities to introduce the first fee increase in a generation in order to help struggling institutions, amid claims that 40 per cent face making a loss this year.
Concerns about the policy were also recently raised by the Association of School and College Leaders, which warned in its response to the Treasury's consultation on the policy that introducing the sales tax in the middle of the school year could lead schools to make unbudgeted staffing changes, resulting in job cuts. It has called on the Treasury to delay the implementation until September.
The change would make the UK the only current western country, aside from New Zealand, to tax education. The only real-world example of a country latterly introducing VAT to private schools is Greece, which imposed a 23 per cent tax on school fees in 2015, only to later roll it back following the closure of smaller schools and pressure building up on the state sector.
Around 600,000 children – about 6 per cent of UK pupils – are currently educated privately. The policy is predicted to result in an as-yet unknown number of children being removed from independent schools and placed in the state sector, with estimates ranging from 3 per cent to more than 20 per cent.
Critics of the policy point out that VAT is a tax on the consumer, not the business, adding that staffing costs account for more than 75 per cent of independent schools’ budgets, leaving them little headroom to make efficiency savings.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
A%20QUIET%20PLACE
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EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5
Killing of Qassem Suleimani
TRAINING FOR TOKYO
A typical week's training for Sebastian, who is competing at the ITU Abu Dhabi World Triathlon on March 8-9:
- Four swim sessions (14km)
- Three bike sessions (200km)
- Four run sessions (45km)
- Two strength and conditioning session (two hours)
- One session therapy session at DISC Dubai
- Two-three hours of stretching and self-maintenance of the body
ITU Abu Dhabi World Triathlon
For more information go to www.abudhabi.triathlon.org.
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
RESULT
Arsenal 0 Chelsea 3
Chelsea: Willian (40'), Batshuayi (42', 49')
Series info
Test series schedule 1st Test, Abu Dhabi: Sri Lanka won by 21 runs; 2nd Test, Dubai: Play starts at 2pm, Friday-Tuesday
ODI series schedule 1st ODI, Dubai: October 13; 2nd ODI, Abu Dhabi: October 16; 3rd ODI, Abu Dhabi: October 18; 4th ODI, Sharjah: October 20; 5th ODI, Sharjah: October 23
T20 series schedule 1st T20, Abu Dhabi: October 26; 2nd T20, Abu Dhabi: October 27; 3rd T20, Lahore: October 29
Tickets Available at www.q-tickets.com
Stat Fourteen Fourteen of the past 15 Test matches in the UAE have been decided on the final day. Both of the previous two Tests at Dubai International Stadium have been settled in the last session. Pakistan won with less than an hour to go against West Indies last year. Against England in 2015, there were just three balls left.
Key battle - Azhar Ali v Rangana Herath Herath may not quite be as flash as Muttiah Muralitharan, his former spin-twin who ended his career by taking his 800th wicket with his final delivery in Tests. He still has a decent sense of an ending, though. He won the Abu Dhabi match for his side with 11 wickets, the last of which was his 400th in Tests. It was not the first time he has owned Pakistan, either. A quarter of all his Test victims have been Pakistani. If Pakistan are going to avoid a first ever series defeat in the UAE, Azhar, their senior batsman, needs to stand up and show the way to blunt Herath.
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
UAE currency: the story behind the money in your pockets
More coverage from the Future Forum
The specs: 2018 Jeep Compass
Price, base: Dh100,000 (estimate)
Engine: 2.4L four-cylinder
Transmission: Nine-speed automatic
Power: 184bhp at 6,400rpm
Torque: 237Nm at 3,900rpm
Fuel economy, combined: 9.4L / 100km
DIVINE%20INTERVENTOIN
%3Cp%3EStarring%3A%20Elia%20Suleiman%2C%20Manal%20Khader%2C%20Amer%20Daher%3C%2Fp%3E%0A%3Cp%3EDirector%3A%20Elia%20Suleiman%3C%2Fp%3E%0A%3Cp%3ERating%3A%204.5%2F5%3C%2Fp%3E%0A
Notable cricketers and political careers
- India: Kirti Azad, Navjot Sidhu and Gautam Gambhir (rumoured)
- Pakistan: Imran Khan and Shahid Afridi (rumoured)
- Sri Lanka: Arjuna Ranatunga, Sanath Jayasuriya, Tillakaratne Dilshan (rumoured)
- Bangladesh (Mashrafe Mortaza)
Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
