Three claimant groups, including one representing children with special educational needs (SEN), are gearing up to challenge the government’s VAT policy on private schools next month.
As of 1 January, private school fees in the UK, including tuition and boarding, are subject to 20 per cent VAT, a change announced by Chancellor Rachel Reeves in the autumn Budget.
With this added VAT, the government predicted a net benefit for HM Treasury of £1.3bn to £1.5bn per year.
However, the rise in costs will cause some parents to struggle to absorb the fee hike; along with rises in NIC, there are concerns that some private schools may face closures.
Back in December, the Independent Schools Council (ISC) revealed that about 8,000 children had been pulled out of private schools before the new academic year, while a further 2,500 had followed since.
Legal action was issued to challenge this decision by the ISC, parents of children with SEN and those who operate faith schools.
Earlier this year, a critical report by the Public Accounts Committee (PAC) found the special educational needs and disabilities system was “in disarray”, “mired in red tape, lacking funding, and failing to produce value for money”.
The Department for Education (DfE) said the government was “making progress” on the issue with a £1bn investment in special educational needs and disabilities.
James Gardner of Sinclairs Law, acting for the parents of children with SEN, told City AM that “imposing VAT on education will hit the most vulnerable hardest.”
“Local authorities are already unable to provide the care needed by state school pupils with SEN.”
“The government knows that the system is broken – but is pushing ahead with these ideological measures that will make it much worse,” he added.
He highlighted that “it’s a cruel tax, and we are fighting to overturn it. Shouldn’t Bridget Philipson be focusing instead on providing the best care for these struggling pupils?”
Sinclair’s Law funds its case via crowd justice, known as Education Not Discrimination.
The three claimant groups will face HM Treasury and HMRC at an expedited hearing at the Divisional High Court on 1 April for a judicial review.
The DfE sought to intervene, but Judge Martin Chamberlain pushed back against it.
Lord Pannick KC is leading ISC’s application, Jeremy Hyam KC of 1 Crown Office Row is leading for the children with SEN, while barrister Bruno Quintavalle is leading for the faith schools.
Lord Pannick KC will cover the European Convention and discrimination points (excluding SEN), and Jeremy Hyam KC will focus on discrimination against children with SEN.
The government seeks to put up a big fight as it spends vast resources on senior lawyers. It enlisted not one but four Silks, the most senior barristers, including Blackstone’s Sir James Eadie KC.
The hearing will last three days and focus on legal submissions, with an outcome that could be crucial for some parents and affected schools.