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The government has stood by its decision to impose VAT on private school fees, asserting that this measure promotes a more equitable tax system. During proceedings in the High Court, representatives for Chancellor Rachel Reeves, along with members from HMRC and the Department for Education, emphasized the intention of raising standards for the 94% of students enrolled in state schools by ensuring that parents of private school students contribute their fair share to the tax system.
This judicial review was initiated by three distinct groups, which include parents of children with special educational needs and disabilities, as well as representatives from low-paying faith schools. These parties contend that the VAT policy is non-compliant with human rights legislation and discriminatory in its implications.
Incorporated in Labour’s election manifesto last year, the VAT policy was officially implemented on 1 January across the UK. Sir James Eadie, the First Treasury Counsel, articulated before the court that the government is not obliged to provide financial support for private education.
The overarching aim of this VAT policy, according to government officials, is to bolster tax revenues for the purpose of reinvesting in public services, including the state’s educational offerings. Extensive consultations were conducted regarding the policy’s formulation, weighing potential exemptions for small faith institutions, international schools, and children with special educational requirements.
The court heard that the government assessed whether a delayed implementation schedule, beginning in September 2025 instead of January 2025, would be more appropriate. Ultimately, however, the government dismissed the idea of exemptions after consultations, arguing that such changes would be impractical and administratively burdensome. Moreover, they asserted that postponing the policy’s enforcement would adversely impact revenue generation.
It was noted that only fees for children with a local authority education, health, and care plan (EHCP) explicitly naming their school will remain exempt from the new VAT charges. Sir James reiterated that parents wishing to opt out of the publicly funded educational system could select any private school they could afford or choose to homeschool their children.
He further stated that the assertion that raising private school costs would violate common law does not hold merit. The government is seeking the dismissal of all three claims presented in the judicial review.
Families involved in the legal challenge assert that their children’s needs cannot be sufficiently met within the state educational system. Jeremy Hyam KC, representing two children with SEND enrolled in private institutions, informed the court that an estimated 6,500 children with SEND without EHCPs could leave the private education sector due to the VAT adjustments, as suggested by the government’s own data.
Hyam argued that transitioning vulnerable children from a supportive school environment to one that is inadequate for their needs lacks substantial justification and fairness. Additionally, Bruno Quintavalle, representing four small Christian schools, criticized the VAT initiative as a hastily conceived plan.
If the lawsuit succeeds, it could prompt the government to reconsider the policy, although there would be no legal requirement for them to do so. The hearings are set to conclude on Thursday, with a ruling expected in the near future.
Source
www.bbc.com