Government levy could cost Durham University £9.8M
By Jasmine Davey
The Labour government has announced plans for a levy on fees paid by international students, which could cost universities across the UK £621 million a year.
International fee-paying students constitute a considerable portion of universities’ income, with individual fees reaching £38,000 per year. It is estimated that international students contribute £41.9 billion to the UK’s economy.
If implemented, the levy would take the form of a 6% surcharge on universities’ income from international student fees. For Durham University, this could amount to £9.8 million. However, the government has not yet clarified whether the levy would be a one-off payment made universities for each student entering the UK, or an annual fee applied for every year of study. If it is the former, the overall cost would be significantly lower.
According to its most recent financial statement, the University received £164 million in tuition fees from international students in 2024. This constitutes 54% of its tuition fee and education contract income, which totalled £302 million. Therefore, under the levy, the University could be forced to pay the government roughly £9.8 million.
Universities are currently exempt from VAT on tuition fee income. However, under the new levy, over half of Durham University’s tuition fee income would be taxed. The University, which has recently reached its £15 million professional staff savings target through voluntary severance, has not yet announced how the levy may be incorporated into its budget.
“We are aware of the UK Government proposal for an international student levy”, a Durham University spokesperson said. “While the details are yet limited, we are working with other universities in very active dialogue with the Government to assess potential implications.”
The proposal of this levy comes alongside a government crackdown on universities accepting foreign students on study visas due to concerns about ‘back door’ asylum claims. It is not yet known how these changes would affect international student numbers, or universities’ attitude towards accepting them. The Home Office estimates that the levy will cut annual student numbers by 14,000 nationwide.
Durham University currently aims for 36% of students to be international fee payers. Palatinate previously reported that it tripled its expenditure on agents to secure international students between 2015/16 and 2022/23. Currently, 31% of Durham students are from outside the UK.
The money generated from the levy would be used to fund “the higher education and skills system”. Further details will not be announced until the autumn budget is released. As it stands, this levy remains a proposed policy in the Home Office’s recent immigration white paper, and does not apply to 2025/26 entry. It is not known when, or if, the policy will be placed into effect.
Image credit: Jasmine Davey
