Private schools and parents lose High Court challenges over VAT on school fees

Powys County Times

13-06-2025

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.
The Treasury defended the challenges over the policy, which was introduced on January 1, 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 does interfere with some of the group's human rights, there is 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'.
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.'
The High Court previously heard that pupils with SEN who have education health and care plans (EHCPs) naming a private school placement, the responsible local authority will pay the fees of that school and can reclaim the VAT paid.
Discussing an exemption for children with SEN without EHCPs, the judges said there is 'no real dispute that the system was in the very recent past in a parlous condition due to a chronic lack of funding' and that the main justification for not creating an exemption is that it would be unfair to children with SEN in state schools.
They continued: 'As we see it, the fundamental difficulty with the claimants' case is that the clear evidence they rely on, which is now materially agreed, shows not only how bad it might be for them if they had to transfer to the state sector, but also how bad it currently is for many of the 1.1 million children with SEN who are already being educated in that sector.'
The judges added that the exemption would mean the Government would lose out on 'a very substantial slice of the revenue it hopes to raise', which could be used for SEN provision in state schools.
'The aim was redistributive — and unapologetically so,' the judges said.
As well as religious beliefs and SEN, the High Court was told that some children are 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.'
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 added: '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.'