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The government’s private school VAT raid is facing yet more problems, as three private Christian schools and a group of parents are set to launch a court challenge to the plan.
This comes as ministers are poised to provide concessions to military families, with the Treasury reportedly considering exemptions to the tax hike amid growing concern about the impact of the policy on services personnel.
Emmanuel School in Derby, the Branch Christian School in Yorkshire, and the King’s School in Hampshire have threatened the government with a judicial review if they do not drop the draft legislation, claiming that the introduction of VAT on school fees would breach human rights law.
In a letter to the government, they said the proposed policy would unlawfully discriminate against them because it is likely to force Christian schools to close.
Andrea Williams, chief executive of the Christian Legal Centre, told The Times that the tax raid would “make independent faith schooling unaffordable for many families and may force some small faith schools to close”.
Meanwhile, warnings from military families that they could leave the armed forces as a result of fee increases have triggered cross-government discussions to consider exemptions, The Telegraph reported on Wednesday.
The Treasury previously said it would “closely monitor the impact” of the policy on the children of serving personnel with a view to considering changes next year.
Ministers are reportedly looking at a number of options to ease pressure on military families ahead of the Budget, where the legislation will be formally announced.
One option being considered is a VAT exemption for those in receipt of the Continuity of Education Allowance (CEA) – a taxpayer-funded contribution to boarding school fees for services families, which can cover up to 90 per cent of fees.
The government could also adjust the CEA to account for VAT, protecting service families from the rising cost.
In a letter to the Treasury in September, the Army Families Federation warned that many families will consider leaving the armed forces if the government fails to implement exemptions.
The charity cited a poll showing that 70 per cent of those with privately educated children would quit if further support is not provided.
“Any failure to mitigate the effect of this policy will lead to disincentivising service personnel to remain in the army, at a time when retention is already a critical concern for the MoD [Ministry of Defence]”, it warned in its formal response to the Treasury’s consultation on the plans.
There has been growing concern over the planned VAT raid, with unions and industry experts warning that meeting the 1 January deadline could cause administrative chaos and job losses, as well as putting pressure on the state sector.
The controversial plan will fund 6,500 new teachers for state schools, Labour has said.
But the NASUWT teaching union said while it shares the government’s ambition to “break down the barriers to opportunity”, it called for a more “reasonable timeframe” in order to avoid “excessive disruption for teachers, pupils and parents”.
Last month, The Independent reported parents are already deciding against sending their children to private schools as a result of the controversial VAT policy.
Headteachers of smaller, specialist private schools say they have little room in already-squeezed budgets to make cuts, leaving few alternatives but to hike fees by 20 per cent – and parents are turning down places as a result.
A government spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”
They added: “We do not comment on potential litigation matters.”
