ISC Daily News Summary

In an interview with Martin Stanford on LBC, ISC CEO Julie Robinson discussed the impact VAT on fees would have on schools and families, and explained the reasoning behind the decision to pursue legal action. She said: “Now we’ve seen the detail of the Budget and the lack of concessions on either the timing or the mitigations around this policy, the ISC Board feels there’s little choice left now but to take the legal route. It’s a human rights challenge on educational choice and discrimination, and we’re going to be defending the rights of families who have chosen independent education but may no longer be able to do so as a result of VAT on their fees.” The Telegraph reports that chancellor Rachel Reeves failed to acknowledge a legal threat sent by independent schools in August, in which they warned that her party's VAT policy may amount to “unlawful discrimination”. The paper has seen a legal letter sent by law firm Kingsley Napley in August outlining the ISC's concerns over the policy, confirming that ministers were made aware that proceeding with its VAT policy risked a potentially costly legal challenge. The paper refers to Ms Robinson's recent statement that the decision to launch legal action against the plans “has not been taken lightly and has been under consideration for many months”. By Poppy Wood.

Sarah Cunnane, the ISC's head of media and communications, was interviewed on the legal challenge by LBC's Ben Kentish last Friday. During the lengthy debate, Ms Cunnane explained why the challenge had been initiated, adding: “The reality of the diversity of our sector has been dismissed and as a result we are very concerned about SEND provision, specialist provision and small faith and girls’ schools that have all been put at unnecessary risk.” On the notion of the policy breaching human rights legislation, Ms Cunnane spoke of the “families for whom independent schools are not just a choice but a necessity”, and referenced smaller Jewish schools as one such example where there is no equivalent in the state sector. Listen from 01:05:15.

A single mother with three children at independent school is challenging the government's VAT on fees policy, claiming it discriminates against women. Speaking to The Sunday Times, the anonymous mother said the VAT increase would add £280 monthly to her costs. The case is based on the argument that children of single mothers are being discriminated against by Labour's VAT policy as it could price them out of schools that are meeting their needs, breaching their right to education under the European Convention on Human Rights and the Human Rights Act. By Sian Griffiths.

Parents who paid their children's independent school fees in advance in an attempt to avoid the impact of Labour’s VAT on fees policy may still be subject to the tax, the government has warned. Ministers have already introduced “anti-forestalling” measures, which mean that all school fee payments after July 2024 this year will incur VAT, but the Treasury has now warned that parents who made the payments before that deadline could also be targeted by HM Revenue and Customs (HMRC), with the payments treated as tax avoidance. Chief executive of the Independent Schools' Bursars Association (ISBA) David Woodgate is quoted, saying: “HMRC’s aggressive approach to looking at fees in advance paid before 29 July is particularly unwelcome given how vague and unhelpful its guidance to schools on VAT has been and, in large part, remains.” By Steven Swinford, The Times. 

The Telegraph reports the families of military service personnel face steep increases in independent school fees from January, despite Labour's promise to protect them from its tax plans. While ministers are planning to increase funding for the Continuity of Education Allowance (CEA), which helps subsidise school fees, critics have argued that this will not prevent higher costs for military families and may worsen recruitment and retention issues. Assuming a 15 per cent uplift in CEA, military families would be able to claim the new maximum allowance of £31,236 but they would be left having to meet the difference of £4,764, meaning their fees would increase by 56 per cent. Conservative peer Lord Kempsell, who has campaigned for immunity for military families, welcomed the exemption but called for "clarity on this from the government immediately”. On the likely impact of Labour's tax plans on specialist independent schools, head of Moon Hall School, Reigate Michelle Catterson said ministers are still “punishing” families whose children have special educational needs and disabilities (SEND). By Pieter Snepvangers, Noah Eastwood and Poppy Wood.

Independent school parents face paying different fees for the same education under Labour's VAT policy, iNews reports. According to industry insiders, "flexible” fee structures could become more common so that parents can “shop around” and negotiate for the best price for their child's education. This could result in parents paying lower fees based on the school’s discretion rather than the usual structures of a means-tested bursary or a talent-based scholarship. The anonymous chair of an independent school on the south coast warned schools against offering differential pricing because it would be “very difficult for finance departments of a school to manage” and “extremely problematic” for fairness and transparency. By Connie Dimsdale.

Andrew Lewer MBE MP writes in Independent School Management Plus arguing the government could mitigate the impact of its tax on education by allowing independent schools to convert to free school status, which would bring them under state funding. This move could help preserve schools that might otherwise close, benefitting students and local communities while also providing an alternative for parents concerned about rising fees, he suggests. Mr Lewer writes: "A large number of the schools that would be in a position to make this transition are currently charities, rather than proprietorial schools, and this would ease the government’s passage in making these transitions at scale should they be minded to do so."

Writing in The Telegraph, William Sitwell says the government's tax plans raise concerns about job security for essential staff, including cooks, groundsmen and cleaners. "Having done little consultation work on the imposition of VAT on independent schools prior to coming into power, Labour has no idea of the ramifications and now just puts its head in the sand", he writes. The writer and broadcaster also argues that while Labour's policies aim to support working people, they may inadvertently harm them.