HE families in the US have an advantage over HE families in Europe

Not many people think of the US as being a tax haven but in certain respects it is. European and American HE families pay taxes on their educational supplies but American families pay much less. The EU demands that VAT (now raised from 15% to 17.5% in Britain) is charged on the cost of internet access, IT services, and the fees of online education courses including distance learning schools. The US does not impose a system of VAT. The closest equivalent to VAT in the US is the state sales tax, but internet access, IT services, and the fees of online education courses are exempt from this tax. Certain items purchased by American HE families such as computer hardware or stationery is covered by the state sales tax. Americans still generally pay less than Europeans because state sales tax rates are typically between 5% and 10%, whereas VAT in Europe is between 15% and 25%.

These differences in the taxation system between the US and Europe give American HE families an advantage over those in Europe.

What is rather strange in the UK is that fees for posh schools such as Eton are exempt from VAT because of legislation passed in the 1970s when VAT was introduced, yet a HE child taking a GCSE via a distance learning college has to pay VAT on the college fees.

Print  Print