Business opposes graduate tax

Jan 16 2003 by Brian Amble Print This Article

Company Finance Directors are overwhelmingly opposed to the idea of a graduate tax because it will deter many people from going to university.

Almost three-quarters of UK finance directors believe government plans for a graduate tax are wrong, according to a survey undertaken by Reed Accountancy Personnel and Accountancy Age.

Following comments from Charles Clarke, Education Secretary, that students would be charged after they graduate, over 300 financial directors were asked: "The government wants to tax graduates more. Should they?" 74 per cent of respondents said no.

Many reasons for abandoning these plans were proposed. One anonymous director stated: "More and more people will be put off going to university if we do this," whilst another director called the scheme a "half thought-through argument."

Nick Watkins financial director, Contisteel Ltd warned the plans could create additional issues: "I cannot see the point of this. It is 'robbing Peter to pay Paul' and will create a further tax administration burden," he said. Another director warned the tax "will make even fewer people see the degree right through." 19 per cent of respondents thought the government should tax graduates more.

However, many finance directors thought the increase in tax should be linked to earnings or income.

Bruce Coulter, financial director, Albany International expressed these concerns: "Graduates should pay based on the degree they undertake, when their income reaches a certain level," he said.

Richard Post, managing director, Reed Accountancy Personnel, said: "There is obviously strong feeling amongst UK finance directors over the issue of a graduate tax. Their concerns over the effect of the tax, and the practicalities of implementation, will make an interesting comparison with government plans due to be unveiled later this month."