The Labour party came into office last year after promising to impose VAT on school fees. It went on to introduce this policy within months of gaining office, with the new policy taking effect on 1 January 2025.
This decision was challenged in the High Court back in April 2025, and on 13 June the High Court issued its decision, confirming that the government’s actions were lawful and that school fees will remain subject to VAT.
In the press:
BBC – Private schools lose High Court challenge over VAT changes
The Guardian – High court dismisses challenges against adding VAT to UK private school fees
Independent Schools Council – High Court rejects VAT legal challenge, as ISC vows continued support for schools and families
Who was challenging the government?
The challenge involved three separate judicial review claims, which the High Court heard together at a rolled-up hearing. These three claims were brought by:
- Families backed by the Independent Schools Council.
- “Education not Discrimination”, which is a group of parents whose children have special educational needs and disabilities (SEND).
- A number of faith schools and families.
On what basis did they bring the case?
These groups sought to argue that VAT on school fees is incompatible with some of the rights protected by the European Convention on Human Rights, namely Article 2 of the First Protocol, which is the right to education, and Article 14, with is the right to protection from discrimination. Some of the arguments put forward for why this could be the case included:
- For many pupils with SEND, their needs are far better met in the independent sector.
- The many different reasons for which families may have chosen a single-sex education. Some of the submissions to the Court concerned the perceived social and academic benefits of a single-sex education, as well as concerns for girls’ safety in a co-educational school.
- The reduced access to education in line with philosophical/religious convictions that may be brought about as a result of the decision to impose VAT on school fees. The Court heard, in particular, concerns about the safety of children from religious backgrounds in a secular school, especially in areas without state-funded faith schools.
- None of the other 46 Council of Europe states impose similar taxes on independent education.
How did the government defend its position?
The government defended the challenge on the basis that it was a manifesto commitment which they say is projected to bring in on average £1.6 billion per annum in revenue, which they claim will help improve schools and education across the board, allegedly funding an additional 6,500 teachers.
What does this mean for schools?
The High Court’s decision was not surprising – with VAT on school fees having been a flagship policy in the Labour Party’s manifesto, the Court was unlikely to overturn the government’s decision. However, it will nevertheless be unwelcome news for independent schools, with many schools reporting significant drops in pupil numbers. The impact of this decline in pupil numbers has resulted in a number of schools facing existential challenges, and having to resort to redundancies and mergers in order to avoid closure.
How Moore Barlow can help
In the last few months we have assisted schools in navigating their way through these challenges, and any schools that need support in considering their options should feel free to get in touch with our Independent schools team.
