Chancellor spending hundreds of thousands in legal fees defending her VAT raid on private school fees

Rachel Reeves is spending hundreds of thousands of pounds in legal fees defending her controversial VAT on school fees policy, as an unprecedented legal challenge looms.

Parents opposed to the 20 per cent education tax are crowdfunding to enable them to launch next months landmark case at the High Court, on behalf of their children who have Special Educational Needs (SEN).

A legal source described them as fighting to avert really dire scenarios on behalf of many claimants who are very, very vulnerable. 

Meanwhile the Chancellor, who is the defendant, has employed four KCs – the most experienced and expensive barristers in the land – to lead the Governments case.

Losing in court could force the Government to abandon the tax, which affects all 550,000 pupils in the independent sector. Around 100,000 of these have special educational needs. 

Legal experts said the serried rank of barristers was a clear sign the Government saw the case as a direct threat to a manifesto promise and an unprecedented challenge. One said: It is very, very rare that a flagship piece of legislation like this is challenged in the courts.

The practical implications are absolutely immense because you have thousands of schools around the country that are currently registered for VAT or in the process of registering, and hundreds of thousands of parents working out how they are going to pay it. The complexity and scale of what would then have to be undone if this legislation was kicked out is enormous.

Parents bringing the April 1 judicial review say the tax breaches their childrens rights to have the education they need because it makes it unaffordable.

Rachel Reeves is spending hundreds of thousands of pounds in legal fees defending her controversial VAT on school fees policy

Losing in court could force the Government to abandon the tax, which affects all 550,000 pupils in the independent sector (stock image) 

In papers filed ahead of the case the Government denies this, saying the children would receive the education they need in the state sector.

One source said: The Government is likely to be paying tens of thousands of pounds a day for each KC to work on the case. Their total bill will run into hundreds of thousands.

The Mail on Sunday was told the case will be one of the most high-profile cases ever to be heard in the administrative division of the High Court.

James Gardner of SinclairsLaw, representing the claimant group, said: Tens of thousands of parents are behind this unprecedented challenge to a totemic and harsh government policy. The stakes for pupils with severe SEN are unimaginably high.

Even the Government admits that the state SEN system is completely broken, and its getting worse every year. But the Government isnt backing down – it has committed vast resources to this battle, and is fighting hard.

A government spokesman said: We do not comment on ongoing litigation matters.

Ending tax breaks for private schools will raise £1.8 billion a year by 2029-30 to help deliver 6,500 new teachers and raise school standards, supporting the 94 per cent of children in state schools to achieve and thrive.

News of the case comes as two more independent schools – Falcons School in Putney and Ursuline Prep in Ilford, told parents they are likely to close due to financial pressures.

A dozen school closures have been announced since VAT was imposed on fees in January.