Labours VAT raid on private schools condemned by families as ill-thought-out as lawyers tell High Court it puts parents in difficult or impossible positions

Labours private school VAT raid is ‘ill thought-out’ and damages children, a landmark High Court case has heard.

The Government has ‘misunderstood’ how badly the new 20 per cent tax on fees will affect children with special needs, lawyers said. 

In addition, ministers ploughed on with the policy despite being warned straight after the General Election that a quarter of those affected were from poorer families, they revealed.

Dozens of angry families crowded outside the court today to protest against the tax, with placards reading ‘Education Not Taxation’.

Three groups of families – most of whom are anonymous – are joining private schools to bring a judicial review claim.

They say the tax is in breach of their right to education under the European Convention of Human Rights and is discriminatory.

Bruno Quintavalle, representing some of the families, said in written submissions: ‘The government’s ill-thought-out proposal introduced in haste, with no adequate notice and without the possibility of exemptions, puts the parents in difficult or impossible positions.’

Other written submissions on behalf of families suggest the Government has a ‘very significant misunderstanding of the reality’ facing children with special educational needs and disabilities (SEND).

Claimants Stephen White and son Josiah, 14, who have chosen not to be anonymous, attended the High Court with sister Joy

Dozens of parent protesters stood outside the High Court to support the claimants

Children not directly involved in the case joined the protest outside the High Court

They say the Government wrongly ‘seems to assume’ that all children with SEND can get an Education, Health and Care Plan (EHCP), which would entitle them to a higher level of state-backed care.

In reality only a small proportion can get this help – leading many parents to pay for it themselves by choosing private schools.

And the court heard the Government was warned 25 per cent of those hit by the tax will fall in the ‘bottom half of the household income distribution’.

This warning was delivered by ‘officials’ to James Murray, Exchequer Secretary to the Treasury, on July 6 2024 – two days after the General Election, documents show.

But despite knowing the tax would impact a large number of poorer families, the Government doubled down on the tax, which came into effect in January.

Lord David Pannick KC, also representing families, said: ‘The application of the law does have a damaging effect on individual children and their families.’

One claimant family is paying for their child with autism to attend a private school using disability living allowance but will have to pull them out due to the VAT.

More than 10 per cent of families using the 1,400 private schools affiliated with the Independent Schools Council (ISC) have annual gross household income of less than £50,000, the court was told.

Children not directly involved in the case joined the protest outside the High Court

Protesters gathered outside the High Court with placards to protest against the new tax 

Charlie Gunns, 12, who has transverse myelitis, and his mother Leanne, came from their home in Norwich to support the claimants

Lawyers say a ‘significant cohort’ of children with SEND may be displaced from their schools because their parents can no longer afford the fees.

Lord Pannick pointed out the Government has publicly admitted the state SEND system ‘isn’t working’ and outcomes ‘are just not good enough’.

Among the other claimants are also Jewish pupils at specialist religious private schools who fear anti-Semitic attacks if they go into the state sector.

There is also a girl who had to attend a single-sex private school – the only all-girls school in her area – due to ‘harassment’ by boys at her co-educational state school.

And there are also claimants using Christian private schools because they cannot obtain the same religious education in the state system.

One is Stephen White, who has chosen not to be anonymous, and whose eldest four children are at Bradford Christian School, a private Christian school in West Yorkshire.

However, Sir James Eadie KC, representing the Treasury, HMRC and the DfE, said abolishing the VAT exemption is expected to yield between £1.5 and £1.7 billion per year.

He said the tax ‘does not make those measures an interference with freedom to offer or receive private education.’

A Government spokesman said: ‘We do not comment on ongoing litigation.’