Private schools lose High Court legal challenge to overturn VAT fees

Private schools have failed in a bid to get VAT being applied to school fees from January 1 overturned.

A group of private schools, pupils and their parents have lost High Court challenges over the imposition of VAT on school fees.

Several schools, children who attend them and their parents, previously brought legal action against the Treasury, claiming the policy of applying VAT to fees is discriminatory and incompatible with human rights law.

This includes children and families at faith schools, and families who have sent their children with special educational needs (SEN) to private school.

School girls arrive at Glenalmond College for the first day of term. Legal action is being taken that could impact on the decision to charge VAT for private schools. Picture: Jeff J Mitchell/Getty Images | Getty Images

From January 1, all education and boarding services provided by a private school became subject to VAT at the standard rate of 20 per cent. The decision to introduce VAT fees impacted on all private schools in Scotland, with the average increase in cost to parents being 14 per cent.

The Treasury defended the challenges over the policy, with HM Revenue and Customs and the Department for Education (DfE) also taking part.

Three judges at the High Court dismissed the three challenges in a decision given on Friday.

Dame Victoria Sharp, Lord Justice Newey and Mr Justice Chamberlain said in a 94-page decision that while the legislation did interfere with some of the group’s human rights, there was a “broad margin of discretion in deciding how to balance the interests of those adversely affected by the policy against the interests of others who may gain from public provision funded by the money it will raise”.

The three judges at the High Court later said the parts of the European Convention on Human Rights referenced in the case “go no further than the right of access to whatever educational system the state chooses to provide … and the right to establish a private school”.

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They continued: “They do not include any right to require the state to facilitate one’s child’s access to a private school, even if the parent’s reason for preferring a private school is a religious one. Nor do they impose any general obligation on the state not to hinder access to private education.”

As well as religious beliefs and SEN, the High Court was told some children were privately educated because of a need for a single-sex environment because of previous abuse, including one of the pupils in the claim, who was bullied at her local state school.

In their ruling, the judges said the evidence of the mother of the pupil indicated that she had moved her child to a single-sex school for academic reasons, adding “we do not think that there is any evidence to show that AMB ‘needs’ to be educated in a single-sex environment, although we accept that her mother would prefer that”.

The three judges added: “While sexual harassment of girls at school is undoubtedly a problem, we do not consider that the evidence establishes more generally that there is a significant cohort of girls who, as a result of having suffered such harassment, can only be safely educated in a single-sex environment.”

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Sophie Kemp, partner and head of public law at Kingsley Napley, who represented the claimants, described the ruling as a “disappointing decision”.

Julie Robinson, chief executive officer of the Independent Schools Council (ISC), said it was an “unprecedented tax on education”.

She said: “The ISC is carefully considering the court’s judgment and next steps. Our focus remains on supporting schools, families and children.

“We will continue to work to ensure the government is held to account over the negative impact this tax on education is having across independent and state schools.”

Caroline Santer, headteacher at The King’s School, Fair Oak, in Hampshire, one of the schools that brought the legal challenge, said: “After over two months of waiting, this judgment comes as a huge disappointment, but we will continue to challenge the legality of this policy.”

During a hearing in April, Lord David Pannick KC, representing one group of children and their parents, previously told the court in London that for some children currently in private schools their needs are not met by state schools, but the new law applies “irrespective” of a family’s need.”

The High Court was told that as well as religious beliefs and SEN, some children are privately educated because of a need for a single-sex environment because of previous abuse, or because they are only temporarily in the UK and need to be educated in line with their home national curriculum.

Bruno Quintavalle, representing four small Christian schools and parents who have sent their children to them, also previously said the “ill-thought-out proposal introduced in haste” placed parents in “impossible positions”.

However, Sir James Eadie KC, representing the Treasury, HMRC and the DfE, said abolishing the VAT exemption for private school fees was a prominent feature of Labour’s manifesto at the last general election and is expected to yield between £1.5 and £1.7 billion per year.