VAT on fees: ISC CEO and BSA director call for CEA uplift for military families

The letter reads: When people dedicate their lives to protecting this country by joining the armed forces, the government makes them a promise. The Armed Forces Covenant, which the government has pledged to fully enshrine in law, pledges that they will face no disadvantage compared to other citizens, and will be given special consideration in some cases. Education is specifically mentioned as an area where forces families will be supported.

Currently, over 4,000 children who have at least one parent serving in the armed forces receive Continuity of Education Allowance through the Ministry of Defence. More than half of the families who use CEA are junior officer and below – less than 5% are the top four levels by Nato rank. The majority of these children attend independent schools by necessity; there is not capacity in the nation’s state boarding schools to accommodate them. The choice of a boarding school allows children stability, and their parents the flexibility to move with their job without having to uproot their family each time they receive a new post.

However, at present, there is no guarantee that CEA will rise to cover the government’s choice to place VAT on independent school fees. Before the election, Ian Murray, now Secretary of State for Scotland, assured a constituent that he thought there would be “some recognition of the Armed Forces Covenant”. Despite this, the draft legislation says that the impact on forces families will be “monitored”, and the MoD has said that any decision on an uplift of CEA would be made only during a spending review – due to take place after the government’s planned January implementation of its VAT policy. The families making considerable sacrifices for their country deserve more certainty than this.

In terms of the overall money the government hopes to raise from this policy, the cost to make sure no armed forces parent is out of pocket would be small; £11.4 million. The government is implementing this tax outside of the school and tax year – using the same logic, there is nothing to stop officials bringing in mitigations outside of a spending review. Alternatively, a delay of implementation from January to September would allow a spending review to take place while also giving all schools and families the chance to plan and adapt in line with admissions cycles and the academic year.

When the government calls on members of our armed forces to serve, whether at home or abroad, they do not hesitate to answer that call. It is incumbent upon the government to match this with similarly swift and decisive action to make sure that any uplift in their children’s school fees owing to VAT are covered from day one by the MoD. Anything else would be a risk to the recruitment and retention of armed forces members and, therefore, the security of our nation. Beyond that, it would be a dereliction of duty; a breaking of that Covenant. We urge the Treasury and the MoD to listen to the families who will be affected by this change and to act accordingly to make sure their education is protected.

Julie Robinson, CEO, Independent Schools Council

David Walker, director, Boarding Schools’ Association