The decision by Rachel Reeves to slap VAT on private school fees will be challenged in the High Court today. The Independent Schools Council (ISC), which represents private schools in the UK, will attempt to overturn a policy campaigners argue penalises aspiration.
The policy was a key plank of Labour’s general election manifesto but has sparked uproar from parents and forced some institutions to close. It will be challenged by prominent human rights barrister Lord David Pannick KC, who will argue the policy “impedes access to education in independent schools” and is incompatible with the European Convention on Human Rights. The case, being heard in front of the President of the King’s Bench Division, Lord Justice Newey, and Mr Justice Chamberlain, at the Royal Courts of Justice, is the first major challenge to the Government’s social change agenda.
Ms Reeves claimed private schools would no longer be exempt from the 20% VAT rate, claiming the money raised would help “provide the highest quality of support and teaching” in the state sector.
She said the increase levied on schools before being passed on to parents would raise £460m extra to spend on state schools, rising to £1.7bn by 2029/30. This is despite 1,400 private schools helping the state sector by removing pupils from a system on which they do not rely.
Ms Reeves, in her role as Chancellor, is listed as a defendant.
The case is being heard on an expedited basis following a successful argument from Lord Pannick that parents needed certainty because they are already feeling the effects of the policy.
ISC boss Julie Robinson said: “This is an unprecedented tax on education – it is right that its compatibility with human rights law is tested. We believe the diversity within independent schools has been ignored in the haste to implement this damaging policy, with families and, ultimately, children, bearing the brunt of the negative impacts this rushed decision is already having.”
The ISC claims the policy breaches the European Convention on Human Rights, specifically Article 14, the prohibition of discrimination, and Article 2 of the First Protocol, the right to education.
Private schools were clobbered with the VAT hike for the first time on January 1, after the Government announced last summer that the tax raid would start in the middle of the academic year.
The ISC says 8,000 children were pulled out of private schools before the new academic year, while a further 2,500 have followed since.
The hearing is expected to last three days.
Most private schools have levied fee hikes between 12-15%.
Ardingly College, a prestigious a fee-charging boarding and day school in West Sussex, decided to only pass on 10% of the VAT to parents, spread over two academic years.
It said: “From January 1, all UK independent schools were required by law to charge 20% VAT on educational services and any boarding provision. At Ardingly, we are determined to do all we can to minimise the impact of this legislative change on current and prospective families. Ardingly’s Board of Governors have agreed the school will provide a significant package of support to absorb half of the VAT.
“This means that our tuition fees only increased by 5% from January, and then a further 5%, plus inflation, from September, with the College absorbing the remainder.”
For the 2025/26 academic year, parents of Year 7 pupils are charged £8,197 a term, while those with students in the Sixth Form are billed £11,460 a term.