Private schools lose High Court battle against Starmer's VAT raid
A group of private schools, pupils and their parents have lost a High Court challenge over Labour's imposition of VAT on fees.
It comes after six families last year launched a legal challenge against the government's controversial tax raid, claiming the tax raid is discriminatory against certain pupils.
The legal challenge claimed the policy - which imposes 20 per cent VAT on private schools - causes unnecessary harm to certain categories of children, such as those with special needs.
The families were therefore seeking a declaration of incompatibility under section 4 of the Human Rights Act, saying the new tax is incompatible with ECHR rights.
While the legal challenge would not have been able to halt the VAT policy in its tracks or reverse it even if successful, it would have been a major blow to ministers and piled pressure on them to consider further exemptions.
The government has estimated the tax raid will raise £1.7bn per year by 2029-30, money which ministers said would be used to fund 6,500 new teachers for state schools.
So far, private school pupil numbers have fallen by more than 11,000 in England following the tax hike, Department for Education data showed.
In January 2025, there were around 582,500 pupils at English private schools, down from 593,500 at the same point last year.
When the policy was introduced, Treasury impact assessments estimated that private school fees would increase by around 10 per cent as a result of the introduction of VAT,
But in May, ISC figures showed that fees have increased by 22.6 per cent in the last year, with parents now paying out more than £22,000 a year on average.
On average, the Treasury predicts that 35,000 pupils would move into UK state schools 'in the long-term steady state'.
A further 2,000 children would leave private schools, the department estimated, consisting of international pupils who do not move into the UK state system or domestic pupils who move into homeschooling.
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