Labour’s private school tax raid ‘likely illegal’

[Zizzagaaaaaww]

Thought some may like to read this article

archive.ph/i1XD3

Sir Keir Starmer’s planned VAT raid on private schools is likely to breach human rights law, The Telegraph can reveal.
The Labour leader risks falling foul of European Court of Human Rights (ECHR) law <a class="break-all" href="https://archive.ph/o/i1XD3/www.telegraph.co.uk/money/tax/labour-private-school-tax-moronic-policy/" rel="nofollow" target="_blank">over his party’s flagship policy, one of Britain’s top constitutional and human rights lawyers has warned.
Lord Pannick, who has taken on some of the UK’s most high-profile court cases, backed legal advice warning that making private schools subject to VAT was likely to breach ECHR law.
He told The Telegraph: “It would be strongly arguable that for a new government to impose VAT on independent schools would breach the right to education.

“That is because all other educational services will remain exempt from VAT and the charging of VAT on independent schools alone is designed to impede private education, and will have that effect.”

The KC and crossbench peer said that the Labour policy risked breaching two articles in the ECHR which protect the right to education.
He referred to legal advice written in response to Labour policies as far back as the early 1980s, when the country’s most senior lawyers warned that plans to end tax exemptions for private schools or abolish the institutions altogether would likely breach international human rights law to which Britain is signed up.
Previous leaders of the party have floated the idea of taxing private schools as part of plans to integrate them into the state sector. Under former party leader Michael Foot, the Labour manifesto of 1983 pledged to “charge VAT on the fees paid to [private] schools”.
The policy to abolish the schools was eventually shot down by senior lawyers, who argued it could be at odds with the ECHR and spoke specifically about the risk of imposing VAT.
While Sir Keir has ruled out abolishing private schools, he plans to force the institutions to pay business rates and 20pc VAT on tuition fees.
In an unearthed legal opinion from 1987, seen by The Telegraph, the late Lord Lester and Lord Pannick, prominent human rights lawyers, concluded a government “could not lawfully prohibit fee-paying, independent education or remove the benefits of charitable status or impose VAT in respect of such education” while a member of the court.
A foreword to the opinion written in 1991 by Lord Scarman, who served as a Law Lord in the precursor to the Supreme Court, said it would “encourage a challenge which could be mounted by taking the argument to the [ECHR]… if ever a government should seek to abolish or discriminate against [private schools]”.
The opinion was jointly written by Lord Lester and Lord Pannick as advice for the Independent Schools Council (ISC) and later published in its journal. Lord Pannick confirmed his belief that the argument still stands today.

What should really be worrying anyone who cares about state education is that, in Labour's 'fully costed manifesto', the VAT income is the only source of income allocated to education. So if the policy a) gets thrown out by the courts or b) is delayed for a couple of years by legal and administrative complications or c) raises less money than hoped, then Labour have precisely no money to spend on education. A bit of a high risk approach to an area that so desperately needs improvement.

I think it’s a bit ridiculous to accuse private school parents of not paying their way. The majority are by definition high earners and pay a lot more income tax than the average person (as they should of course). They pay for state school spaces they then chose not to use.

Absolutely. It's crazy. This is the best Labour can come up with to support state education!

This therefore comes down to the only thing this policy must be about .. ideology. That alone is worrying, as the party who wants to be by everyone together, already starts off by causing division against a segment of society.

Totally agree. Our local state school is beyond rubbish. There is not doubt that the policy will bring in revenue as I don’t think everyone will leave their independent schools (some will, obviously). But I don’t think that 5% of the school population paying 20% in vat on their school fees is going to provide the funding state schools need to get back on track.

Really? It may even end up costing the taxpayer

Or if it brings in 1% of education budget how will it get state back on track?

This is why the IFS stepped in Labour are relying on low knowledge and a conspiracy of silence

I think there's been a missed opportunity in the TV debates to ask more nuanced questions about this policy. They only ever trot out the same lines about all children deserving a good education.

Yes, we agree with you. But why is this policy the right policy?

Yes I’d say that about a few of their policies

Actually the state had no school place at all for my sen child. He was without of school for a year before a private school took him in. I am really bitter about it. I do think his human right was infringed.

The school that took him, had a mix of ehcp and fee paying students. I'm not sure how viable they be with only ehcp students. (My son has an ehcp) Kier, heartwarmingly, told an independent sen school like ours, that they could make efficiencies just like the state sector.

Yes the efficiencies the state sector had was to leave my child with zero education.

I am not reassured that my son personally wouldn't pay vat due to his ehcp as schools make themselves viable by a mix of students.

Thanks, that was very informative.

Dan Neidle is a very experienced lawyer and tax expert, so I'd be inclined to believe him when he says, "The caselaw couldn't be clearer that this kind of challenge is very far-fetched."

It's also kind of ironic that they wouldn't have been able to do this under EU law as the VAT Directive exempts all education from VAT in the EU. So they can only do this because of Brexit, which they argued against.

You’re not wrong 😆

Unfortunately they don’t seem to have any qualms ‘justifying’ harming kids on an ideological basis…

The thing is these people have ‘grown up’ and do pay their own way. You can accuse them of many things but not that.

And to the poorly educated this policy seems like a good idea..

Yeah, love how they are going on about the ECHR.

When the Tories keep wanting to leave. Supported by the Torygraph.

I don't think it is.

There was no argument then, VAT on education is banned across the whole EU. People might have thought up the policy then, but it would have foundered on the first reality check - there are certain tolerances for national variation to VAT regimes, but introducing VAT to an exempt item isn't one of them.

My guess is that any such challenge, as proposed, will fail. DC have a right to an education, not to any particular provider of that education. As long as the government continues to guarantee that every family who applies for a free state school place will get one, then the child's right to an education is met. (There are of course individual SEN issues where the state's placement might be unsuitable, but that wouldn't impinge on the wider issue of introducing VAT on education)

Organisations AFAIK have no rights to any particular tax regime.

Children in this country are too hungry to learn, schools are struggling to afford teaching assistants and outings. We have to get immigrants for orchestras as music lessons are so expensive and you are whining about helping out. It's disgusting

They’ve also stated that they have no desire to diverge from EU law and want closer relations with the EU. This policy does the exact opposite.

Wrong.
No-one is whining about "helping out". Every parent who choses indi school already pays taxes (many pay higher rate) and we then save the taxpayer around 7K per pupil per year for not educating them. Independent schools save the taxpayer over £40 billion per year.
No-one is disputing that state education needs more funding, what we are saying is that this isn't the way to do it. The sum raised will be tiny and it is smoke and mirrors to stop people realising that Labour aren't actually promising to fund state education ny other way.
As has been pointed out time and time again, the likelihood is that the policy will raise £0. How does that help state schools improve?

Taxing school fees isn’t going to help with those problems though. Even the IFS have said “but don't be fooled into thinking this is going to make any real difference to the amount of money available for public services.” There’s a very real possibility that the policy could produce a net tax loss for the Treasury. If the policy was going to raise money to help the less fortunate in society, parents would likely be more understanding and accepting of it. It isn’t though.

The point is that it will be challenged because it had already been held up once so has precedence. The cost to the state in defending that will outweigh the income from VAT once all the exemptions have been applied (military, SEN etc).

People weren’t forcibly barred from education. All they had to do was get onto YouTube and watch videos. You can learn entire GCSEs that way, for free.

Sadly most people preferred to watch Netflix or play games. But the education was always there for the taking, free. It was a choice not to engage with education.

anyone without the means to get internet should have had paperwork delivered from school and this did happen.

plus what the fuck did you expect the govt to do in a global pandemic? My db is a teacher who ended up nearly dying of covid in intensive care. Is that what you wanted to happen to teachers? Didn’t you think a thousand dying from covid a day was a serious situation??

I don’t think the EU really care about Vat on private education in the UK.

The closer relationship is about trade.

The Vat on education is completely irrelevant to trade.

The EU do care because it is illegal to tax education in the EU hence only Brecit allowed Labour to attempt this policy. Greece tried and failed because of EU law.