VAT rise 'could cost universities £200m a year'
Date posted: 28 Jun 2010
The government's decision to raise VAT could cost universities an extra £200 million annually, it is suggested.
Published by Alison Gamble.
On an annual basis, universities might face added costs of £200 million because of the coalition's plan to increase VAT next year, according to one higher education group.
Meanwhile, Universities UK has also pointed out that cutbacks in government departments could hit spending on universities.
Professor Steve Smith, president of the organisation, has highlighted the important contribution that the higher education sector can make to the country's workforce.
He stated: "Our concern is that universities will suffer a 'double-whammy' of tax increases and spending cuts.
"A VAT increase means an increase in the cost base of universities."
Professor Smith added that it looks like a sum of £3.6 billion could be cut from the country's science and university budget.
This week's emergency Budget also saw the coalition confirm plans to raise capital gains tax for higher earners, with the rate going up to 28 per cent from the current level of 18 per cent.
Please contact Janet Turner, Head of Education for further information or call 01223 225029
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