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.

It is 100% ideological. They're tapping into the sanctimonious desire of the masses to pass moral judgement and impose their ideology on anyone who doesn't agree with them.

I think it’s much less nuanced than that. I think they’ve asked people what they think and it’s a surprisingly popular move so it’s going forward. I think the rationing of winter fuel payments has hit the same note. People want things to feel fair and this does to many.

we already have a ruling on the fact that local authorities only have the responsibility to provide an education not an education of the parent’s choice.

It's a negative right, not a positive right. That means that the government isn't required to provide it, but it's not allowed to prevent it. (Much like the right to family life)

And it’s not like they are banning private schools.

Given that the same Labour leaders have previously backed Labour policy to ban private schools, if the policy doesn't bring in revenue but they still keep it then I wonder whether it could be argued that they're trying to reduce educational options by the back door.

Like I say, it will be tested in court so let's wait and see.

Fairness is subjective though. It has to be factual if something makes fiscal sense or not, and is not in breach of existing laws.

Brexit also felt fair to many and look what mess that got us into. And those shouting the loudest for Brexit were also those who then blamed Boris for the NHS bus trick.

Has anyone actually filed a lawsuit yet? Lots of folks are talking about the possibility, but is anyone actively pursuing it?

I'm quite surprised that private boarding is being included in the new VAT but state boarding remains exempt.

There's an EU VAT law that applying/exempting VAT on the business activities of public services (ie state boarding fees) should be applied only "provided that this exemption is not likely to cause distortion of competition"

So it's another place where we're deviating from EU law.

There is nothing to take action against, the goverment is only saying stuff, they haven’t actually done anything to push it through, they need to kick that off, before anyone can take action.

I don’t think deviating from eu law is going to be that important given we aren’t part of the eu?

I assume state boarding schools accommodate a lot of looked after children, so adding VAT would mean LAs paying it.

No, we don't have to stick to EU law now, but Starmer has said that he doesn't want to deviate from it - and this policy is doing that in multiple places.

I'd have thought that including state boarding then allowing a way for LAs to reclaim it (as they have for EHCP) would be less problematic legally. It almost seems that they haven't really thought it through..

I agree clawback is probably a better model but tweaking things this way and that is probably inevitable at this stage. It’s obviously a huge deal to less well off parents at fee paying schools but I don’t think it is or should be a priority over other decisions being made.

Cranbrook costs 15k to board and 18k at Sixth Form. That is more than many private schools. What is more many private schools only charge that much extra for boarding vs day and it’s a childcare element. Kids who don’t live within commuting distance wouldn’t be able to access the school without the boarding element. Open to challenge and anti competitive arguably.

VAT on boarding. Another area for a legal challenge.
State boarding school - fees paid by “parent” VAT not charged.
“Private” boarding school - fees paid by “parent” VAT charged.
The same service supplied by similar organisations. The difference is only the “ownership”. “Private” might be a charity. “Public” might be a private company?
I also noticed that a local state boarding school lets its boarding during the school holidays to other groups (I saw lots of Spanish kids in the local swimming pool who had arrived in the school bus (logo of school on its side). I suppose that money making venture will be VAT free while a “private” boarding school would not.
All good fun for the VAT inspectors!

It's a question of proportionality. The impact, whilst only on a minority, is hugely significant on them and, frankly, potentially inhumane for children with SEND. That is justified only if the public benefit balances it out. However the revenue raised from this, even in the best case scenario, is trifling and at worst costs money. Sadly, whilst it would be rational to take stock at this point, the potential for it to cost the state money doesn't seem to bother the public or the politicians in the slightest. The politicians have instead tuned out any legitimate concerns which don't fit their narrative and have refused to engage with those affected. It's high handed and dictatorial - fine while you're on the right side of it all (because it feels like your righteousness is validated) but what about when the wind blows the other way? Some might think it's morally right to charge VAT on school fees. Personally, I think it's morally right to ask the very rich to pay taxes, regardless of where they educate their children, and morally wrong for the state to tax provision provided by organisations which are free of their influence. I also think it's worrying that they are no longer going to let academies deviate from the national curriculum.

I was wondering the same thing about Cranbrook!

As a pp said, it’s just talk at the moment, a proposal.

Judicial Review requires a reviewable decision to be made. After that an applicant has three months to bring a JR.

I would imagine that leading public law barristers have already been instructed.

I'm surprised that vocational training is included. My DD goes to a ballet school and has a means tested government scholarship that pays about 70% of the fees. We won't be able to afford to pay an extra 20% so will have to pull her out. It could be career destroying for her.

I know hardly anyone cares about dc being impacted by this policy but I find this sad

I went to state boarding school and there were no looked after children that I can think of.

It was mainly military families and children of parents who had careers that meant they moved a lot, or children who lived very rurally.

Quite a few state boarding schools are also academically selective (like Cranbrook) and run very much like a minor public school.

Same for theatre, dance, stage and music schools. This is what we kept highlighting whenever Labour/supporters of VAT were trumpeting its merits.

I am shocked that vocational schools are not exempt. Given the state pays a lot of the fees I hope they'll be paying the VAT too.

I hope it works out for your DD - it's incredibly sad to be in this situation (and for no actual benefit to anyone).

Most kids at state boarding schools aren't looked after children at all. The largest are home counties, charge as much as private schools and are academically selective. Very competitive to get into. There are some exemptions eg Scotland which serve the isles but the majority aren't in that category

https://www.mishcon.com/news/vat-on-private-school-fees-value-added

Helpful overview, and some interesting questions raised.

“I'm surprised that vocational training is included. My DD goes to a ballet school and has a means tested government scholarship that pays about 70% of the fees. We won't be able to afford to pay an extra 20% so will have to pull her out. It could be career destroying for her.”

@Lopity - that is awful! I hope the ballet school is emailing in and you should too.
I thought the art, ballet & music world had been working so hard to bring ballet, music etc to far more children and now this! What a step backwards!

If they want to do stuff like this, then they would need to nationalise those schools properly and make sure all children get to attend, free at the point of delivery and just based on talent alone!

For ballet schools, we should look at how other European countries do it. If eg Vienna Staatsoper can work with a really good local school and deliver free state education and be flexible to make sure ballet dancers can do both, we should be doing the same! My DB’s kid is musically gifted and he goes to state grammar in Switzerland that has adapted the curriculum so he can do 25 hours of free music training every week. Why can we not organise this as well?

The 'we don't expect schools to pass on the entire 20%' is interesting. Is that a prediction, or a command? What will happen to them if they don't? Why wouldn't they?