§ Mr. Juddasked the Secretary of State for Foreign and Commonwealth Affairs 172W what representations he has received about the impact of VAT on overseas students hostels; what response he has made; and whether he will make a statement.
§ Mr. KershawI have received representations from the United Kingdom Council for Overseas Students Affairs and the International Students Trust and have told these two bodies that I have taken up the question which they raised with my right hon. Friend the Chancellor of the Exchequer.
The present position is that facilities incidental to the provision of education, such as board and lodging, are only exempt from value added tax where they are supplied by institutions themselves providing education which is exempted from the tax by Schedule 5, Chapter 41, of the Finance Act 1972. Broadly this means education provided by a school or university or of a kind provided by a school or university otherwise than for profit. Facilities supplied by hostels other than these are liable to value added tax if their taxable turnover exceeds £5,000 per annum.
I expect no early change in this position but I will keep the question under review with my right hon. Friend.