To ask if anyone is clued up on the challenge this week to VAT on school fees?

[feesss]

we went to look round a school this morning and we obviously asked about VAT and the lady showing us round said there has been a challenge this week so it may not happen? Is anyone aware of this? I can’t see much online about it?

I do generally agree that any case brought under ECHR will face some formidable obstacles - not least, in the lower courts, judicial deference to the legislators. But I think you and Dan Neidle are too certain.

This is an unusual case. Governments don’t generally apply tax where it would create any arguable cause of interference with rights. The absence of case law needs to be seen in that light.

That David Pannick thinks, and says publicly, that the case is arguable (at the very least) ought to give some pause for thought.

The published opinion is that of David Pannick and Anthony Lester. Jeremy Hyam agrees. That is very heavyweight opinion, particularly as this is an ECHR public law issue at its core, not a tax law issue.

FWIW, I don’t much care which way it goes. And I think the objectors on here have damaged the reception of their arguments with relentless threads and hyperbolic statements.

However in my experience the brightest people aren’t necessarily the most successful business wise or in terms of making money, in fact it’s often the reverse. Some of the most successful people I know aren’t bright at all which means that they’ve taken risks that most people who fully understand the potential implications of the risk wouldn’t do, and luckily in their case the risk has paid off

“The published opinion is that of David Pannick and Anthony Lester. Jeremy Hyam agrees. That is very heavyweight opinion, particularly as this is an ECHR public law issue at its core, not a tax law issue.“

That is the crux of the matter. This is not a conventional “tax”. The Labour Party wants to get some of the pie of top private schools, ie a supertax on the big players. They mistakenly chose VAT (taking away charitable status is not workable)- nobody in their right mind believes a true Labour Government would want to tax children with severe SEND who have been failed by the local authority. However, because VAT works how it works they are somehow trying to make it work - fitting a square peg into a round hole. The exemptions they have already introduced are inconsistent and do not work with the concept of a VAT how it is meant to operate. End users are not exempt in VAT? Please show me a precedent for that in real life VAT. VAT is based on turnover and everyone gets taxed.
So it is not a VAT they are introducing and a court will see through that straight away. I think this will fail and will be a big embarrassment for them. They will try and blame into on the courts. I think that is reckless and they will give even more fodder to the Tories to revoke the European Convention of Human Rights. In their ideological attempts they are undermining the very systems that make us a modern democracy. So, in essence, they are no better than the Tories. It is all rather worrying.

‘That is the crux of the matter. This is not a conventional “tax”.’

exactly. The govn can put VAT on anything they choose really.

“FWIW, I don’t much care which way it goes. And I think the objectors on here have damaged the reception of their arguments with relentless threads and hyperbolic statements.“

We had endless threads on Brexit, Covid school closures too - when something feels intrinsically and instinctively wrong to the middle class establishment on MN it tends to translate to endless threads. People cannot necessarily articulate it legally, but they know it is a wrong approach. So it will come across as a rant. But that is the whole point of social media. At least these threads represent social media history, just like the Brexit and Covid ones. And mostly MN was right all along. And it is the politicians who were wrong.

No @Lookslikemeemaw - the Government cannot put VAT on anything they like and say the civil service or those on benefits do not have to pay the VAT, only everyone else. That is not what VAT is.

Well, they are. So…

It’s actually a lot more nuanced than that. There are only 7% of children in private school at any one time. However a greater percentage of children have been in private school at some stage in their school career. Eg state infants, or primary, then private after that. Or private primary with a view to getting in to selective state school. About 20% of 6th form students are in the private provision.

That David Pannick thinks, and says publicly, that the case is arguable (at the very least) ought to give some pause for thought.

What would be the difference between that, and a barrister touting for business, out of interest ?

I think we’d have to presume that Lords Pannick and Lester were instructed to write an opinion and were paid for the opinion. That’s how it works.

Lawyers should, and certainly distinguished KCs do, give dispassionate and objective advice. If these counsel thought a challenge was not properly arguable they’d have said so.

objective advice. If these counsel thought a challenge was not properly arguable they’d have said so.

Oh undoubtedly. However people tend to hear what they want to hear, as Paul Simon once said.

Disability is already a precedent where there can be a vat exemption due to the user rather than the product

https://www.gov.uk/financial-help-disabled/vat-relief

I don’t follow you. Pannick and Lester didn’t “hear” anything except the proposal to levy VAT and take other measures in respect of private schools (some years back). That opinion was published (by the client, the ISC). Pannick has since reiterated his view publicly in the context of the present proposals.

I agree that if the opinion had been “hopeless, don’t bother” - which is Neidle’s and one or two posters’ view - it wouldn’t have been published. But the objective opinion from both barristers wasn’t that. So it was published (by the client). That’s all standard stuff.

There were lots of threads on Brexit and Covid school closures because Brexit affected the whole country and COVID school closures affected every school age child. VAT on school fees directly affects 7% of DC and their parents.Can see the PP's point.

@BotanicalGreen but indirectly it will likely affect thousands more children who will have their state school places under pressure from those who were or would have been in private. Depending on how exactly this pans out, if some schools close entirely, in some areas you'll have hundreds of children all looking for places in a 10-20 mile radius.
If Labour really wanted to do this as a genuine attempt to raise much needed funds and not as a vote winning spiteful "get the rich bastards" they could have
a) introduced an income tax rise on ALL that would raise more and actually mostly come from the service users of state schools
b) looked at a more nuanced policy that comes into play at point of entry from Sept 25 and not applicable to those already in. That would initially raise less but might mitigate the danger of my first point of school closure and would acknowledge that at the heart of this are children just going to school with their friends and in many cases getting the pastoral support they need that wasn't available in state. Take the spiteful "posh little Sebastian" sneers out of the conversation and remember it's real children here.

Personally I thought quite a few would celebrate this Brexii freedom

https://www.telegraph.co.uk/news/2024/10/27/german-embassy-calls-exemption-labour-school-vat

Yes Its the parents of 7% of children currently in private education…but then there’s also the 20% who use it at some point in their education, 100 odd thousand people employed in the sector, grand parents, family and friends, rural areas who’s entire economies rely on the local PS, ex ps school pupils, those who value educational choice being as available as possible, people who think the policy will be a net cost to the tax payer, people who don’t want to see schools close, people who don’t want to see state school class sizes further increase, people who think education tax is backward and embarrasses us as a country, people who think the policy is not compatible with ECHR, people who think it could be damaging to children being forced to move schools, those who think it makes the U.K. a less appealing place to invest and live in and those who think discouraging parent’s investment in education in favour of vatable items will hurt the long term prospects of the country.

To add to @Mrsbabbecho ’s list: in our area of London it’s the dawning realisation of people who had bought in a grammar school area and / or who were assuming siblings would follow on to the same grammar as big brother or sister : competition for places is now much more intense as parents will be switching from private to grammar. And these former private school parents have the money to pay for wall to wall tutoring (as it’s a tiny investment compared to half a million pounds in fees saved for 2x dc)

Of course they’re complaining. Because their diplomats are complaining at them. But the idea that diplomats, many of who are already getting free or subsidised places in these schools aren’t going to be able to afford VAT, is quite frankly ludicrous.
Half of them are already getting free accommodation to go along with their big salaries, subsidised UK life…
I wouldn’t move to another country and then expect to be exempt from their tax laws, just because of my U.K. passport

You are missing the point. Diplomats do not pay income tax or wealth tax in foreign countries.

This tax is not a VAT in essence although they are desperately trying to call it that. It is a hidden wealth tax, without actually calculating people’s real income and wealth. Because HMRC does not have the resources to do that. It is a sham tax in essence.

The list of people you’re ‘subsidising’ grows longer with every comment.

If you have DC who are genuinely grammar school material, there is absolutely no need for wall to wall tutoring. There are equally bright state DC who will hold their own for places.

The key words here are ‘indirectly’ and ‘it will likely’. The majority does not consider themselves to be directly impacted and nobody knows what the impact will be yet. It is considered a niche policy by most.

It is considered a shit policy by many including those in state teaching + SEN charities

As Wes Streeting has said this morning … private schools have been putting theirs fees up exponentially since 2010. What they need to do, like all other schools, is but their cloth according to thier means. They could cut spending by 20% and not pass any of the road into parents.