VAT on training is currently costing the UK in excess of £87.5 million every year. According to Robert Chapman, co-founder of The Training Camp UK, the extra cost discourages individuals from signing up to courses and will perpetuate the skills vacuum.
Chapman is urging the industry to lobby the Chancellor. He believes that until the Government reduces the financial penalties associated with training courses, the cost burden will be too much to bear in the current economic climate.
The campaign already has support from 700 individuals and companies, including the public sector, telecoms, finance and banking, manufacturing, media, and retail industries. Of those who completed the online poll, 98% believed that VAT should be scrapped. Within that category, 65% believed that VAT should not payable for privately funded courses, whereas 35% thought it was equally important to remove the burden VAT on individuals and corporates.
"Unless the situation on VAT changes, there’s a risk productivity in UK plc will suffer as the availability of essential skills falls into decline," said Robert Chapman. "Training can be expensive but the best courses deliver return on this investment, provided they are the right course for the student’s needs and can be completed in realistic timescales. By adding VAT onto courses, the Government is lining its own pockets whilst taking money and profitability away from many UK companies and individuals. In the current economic climate, people should be given as much help as possible to succeed."
At present, 17.5% VAT is added to every training course in the UK. Chapman estimates that 50% more people would take up training if they believed their Government supported them.
"In Singapore, sitting certain training courses, such as the high-level security qualification CISSP, entitles you to a government grant. This has significantly boosted skills in the economy. In the US, there is no sales tax at all training and improving your skills. The British Government needs to follow these examples and encourage, rather than hinder, people. I want to see a coalition of companies within our industry working together to help the individual get the training he or she requires. It’s needed now," he concluded.
You can find out more about the campaign here.