VAT & Private Schools - Update

The Court of Appeal has upheld the government’s decision to impose 20% VAT on private school fees, rejecting a challenge brought by parents of children at low-fee religious schools. The parents argued that the tax would make faith-based education unaffordable and breached their human rights, particularly as the type of religious education they sought isn’t available in the state sector.

In a detailed ruling, the Court acknowledged the serious impact the measure could have on affected families, but emphasised that parents still have the option of home schooling if state education is not suitable for their religious convictions. The judges found the government’s approach - applying VAT to all private schools without exemptions - was objectively and reasonably justified, citing fairness, administrative workability, and the need to avoid abuse.

This decision confirms that, while the new VAT charge may be challenging for some, the government is not required to subsidise private religious education. The policy, which came into effect on 1 January 2025, is expected to raise up to £1.8bn annually to support state education.

The ruling is a significant development for independent schools, parents, and the wider education sector, and will likely prompt further debate about the future of private education in the UK.