Parents have been warned to expect fee rises at private schools from 1 January 2025 despite legal challenges against the Government’s private schools VAT policy.
The Independent Schools Council (ISC) – a lobby group representing more than 1,400 private schools – filed a judicial review claiming that Labour’s flagship education policy is discriminatory.
Six families, supported by the ISC, filed the claim to the High Court on Friday 20 December alleging that introducing 20 per cent VAT on private school fees undermines the human rights of some children, including those with special education needs and disabilities (SEND).
But a leading education lawyer has told The i Paper that the legal challenges are unlikely to stop the policy in its tracks and parents should prepare for fee rises at schools as planned.
Here’s what to expect from Labour’s VAT policy in 2025.
Six families have filed a judicial review to the High Court challenging the introduction of the VAT policy on primary and secondary education at private schools.
Julie Robinson, CEO at the ISC, claimed that diversity within the private school sector has been “ignored” by policymakers, meaning certain categories of children are being discriminated against.
There are six case studies including children with SEND, a vulnerable girl in in a single-sex school, minority Jewish and Muslim families and foreign nationals in bilingual schools.
“As a result of the government’s blanket approach, the impact is likely to be felt immediately by many families and children, many of whom have chosen an independent school for reasons including faith, SEND support, dual-language learning or single-sex education,” said Robinson.
“It is to protect the rights of these families, who are having their choice removed from them by this policy, that we are seeking a declaration of incompatibility,” she added.
The families, who wish to remain anonymous, are calling for the claim to be heard on an expedited basis.
They argue that the introduction of VAT impedes access to education at independent schools and is incompatible with the right to education guaranteed by Article 2 of the First Protocol of the European Convention on Human Rights.
They also claim that the policy infringes Article 14 of the Convention because it causes unnecessary and discriminatory harm to certain categories of children.
The families seek a declaration of incompatibility under section 4 of the Human Rights Act on the basis that the amendments to the Value Added Tax Act 1994 are incompatible with ECHR rights.
Sophie Kemp, partner and head of public law at Kingsley Napley, representing the claimants said: “The families are asking for careful and swift scrutiny of the impact of VAT on their lives which they feel has been ignored by the government as it seeks to rush its policy through.”
Will fee rises go ahead from January?
Parents have been urged to expect fee rises at private schools in 2025 despite the ISC’s legal challenge.
Robert Lewis, partner at Mishcon de Reya LLP and head of education at the law firm, said the judicial review is unlikely to impact the introduction of VAT on school fees.
Asked whether it could have an impact on fee rises from January, he said: “I don’t think it will. I think the policy is going ahead as planned.”
He urged schools and parents to “make plans on the basis that the VAT will be imposed from January”.
“What parents can expect is that they will be charged VAT on their school fees,” Lewis said, adding that they “need to know what schools plan to do in relation to fees as a result of that”.
He said there is a chance that the legal case could be heard before 1 January, meaning there could be a declaration of incompatibility which might prompt the Government to reconsider aspects of the policy.
However, it is unlikely that private schools would reverse mid-year fee rises that have already been set out.
Could the legal challenges reverse Labour’s policy?
Lawyers said the legal challenge, if successful, could eventually prompt the Government to take a second look at its VAT scheme.
However, research by Mishcon de Reya has not found any successful judicial reviews of a finance act.
Lewis, from the law firm, said that Labour might be “more uncomfortable than the previous government” about introducing a law with a declaration of incompatibility, especially as Prime Minister Keir Starmer used to be a human rights lawyer.
“It would put the government in an uncomfortable position to have a key piece of legislation declared as incompatible with the European Convention,” he said.
However, a declaration of incompatibility would not be binding for the Government.
The former Tory government’s controversial Rwanda legislation was found to be fundamentally incompatible with the UK’s human rights obligations. This did not strike down the legislation in itself but it led to the Government reconsidering parts of it.
“There are plenty of cases where a declaration of incompatibility with the convention has led to government revisiting policies,” Lewis said, giving the example of the Rwanda deportation case.
But he continued: “I’m not aware of any successful judicial review of a finance act. There might be one but it’s very difficult to prove a negative.
“We did some research to try and find it, and we couldn’t find anything.”
Robinson, from the ISC, said: “ISC’s legal action is focused on defending the education of children whose families have chosen independent schooling, but who may no longer be able to do so as a direct result of this unprecedented education tax.
“The Government has a responsibility to over 600,000 pupils educated within independent schools, and they need to look again at the impact their policy is having.”
A Treasury spokesperson said: “We do not comment on potential litigation matters.”
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