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.

Legally schools have to invoice the full 20% of VAT. Saying that they don't is Labour being disingenuous ie lying.
Once schools are registered for VAT they can then claim VAT back on certain things although obviously not on their biggest outgoing which is staff wages/pensions etc. Currently private schools pay VAT on everything but can't claim it back. So what Labour mean is that once schools can claim some very small % back, they could offset that against fee rises. However they fail to include the hike in business rates in that calculation.

The language Labour use is calculated to make private schools look grasping and greedy and parents who chose that for their DC, selfish and posh.

@Twistyizzy can you evidence the language has Labour specifically used that makes private schools look grasping and greedy and parents selfish and posh? All I have read is them stating the facts and timing of the policy.

Thanks for the sympathy. Most people just class us as posh and privileged because it's ballet. They don't realise that most of the kids at ballet schools have means-tested government scholarships but the fees are still really, really hard to afford and a lot of sacrifices are made for our children's dreams. This is going to have a catastrophic impact on the arts and most people don't seem to care at all.

All the way through the election using sweeping assumptions and stereotypes plus
Angela Raynor in previous interviews and videos.
Their use of language around tax breaks and loopholes, both of which are false and misleading but appeal to a populist mind set.
Whenever they talk about private schools they link them to privilege, wealth, the elite etc and basically ignore the 100,000 SEN plus 1000s of kids on bursaries etc. The whole narrative has been about making the wealthy pay which ignores the fact that these parents already pay tax AND save the state the cost of educating their children.

The disingenuous assertion that schools dont have to pass on the full 20% when legaly they do.
Their selected use of images of kids at private schools ie in straw boaters.

Their so called "facts" aren't facts because they only have the IFS report which itself conceded that more research was needed to ascertain impact, further research that hasn't been carried out.

You are right, they don't care because Labour have successfully twisted the narrative that all private schools = Eton full of uber wealth parents and kids.
Fundamentally though, Labour don't understand and don't care about any wider impact on eg The Arts etc because those things are for the "elite" who are to be vilified.

“Fundamentally though, Labour don't understand and don't care about any wider impact on eg The Arts etc because those things are for the "elite" who are to be vilified.”

I am not sure it is that - I think they just are not that clever, sadly. I think those in charge did “a deal” with some parts of their own party. But I think it’s undemocratic and we should fight for the Arts in particular. Because that is actuality another key part of the democratic process. It’s so sad to witness this country going to the dogs more and more due to the sheer lack of competency of those in charge.

For example, I had high hopes that Rachel Reeves would be good. I have been left seriously unimpressed already. She comes across as very amateur and not ready for the job whatsoever. I do hope she grows into it quickly!

The performing arts schools kept asking Labour to clarify whether they would be included and to protect them from this change and got no response. It's not that Labour didn't think about it. They just don't care.

I don't know how I'm going to be able to tell my DD. Her whole world will come crashing down.

Labour have consistently refused to engage either the independent sector in any way. Phillipson has never put a foot in an indy school to burst her stereotype of them not being Eton. They have been invited repeatedly to engage and have ignored all invitations/letters/emails/phone calls etc.
That tells you what they think of the sector. They lump it all together as being posh/wealthy people and have no clue about the complex nature of the sector. That's why they had to explicitly exempt state boarding cos they "forgot" about it, why they had to add on exemptions for EHCP and now why at this late stage it looks like they will exempt military at some stage.
Certain people in Labour (Raynor etc) are indeed obsessed with private schools. They never had the opportunity so dont want anyone else to have that opportunity now. It has nothing to do with improving state schools, they just want to end private ones. Others such as Starmer are just hypocrites who are going along with it to appease those who are obsessed.

No @LondonbasedLou - it’s not normal at all. If there were any big discriminatory blunder towards kids/particularly any with SEN, it could cost her her job! It’s another reason I think some of them are very amateurish.

There is literally no rationale explanation to allowing some state boarding schools to be VAT free entirely, but make performing arts pay including on the boarding element for some (or even the top public schools). It’s anti competitive at its core.

They are trying hard to make it go ahead. Currently at consolation stage. The "black hole" announcement was to include bringing this forwards from Sept 25 to Jan 25

I think you may be reading too literally "them not having to pass on the full 20%". Of course VAT is fixed at 20% but what the statement means is that schools may find cost savings and offsets so that the pre-VAT figure comes down, VAT is then applied @ 20% and the revised bottom line figure is not 20% more than the previous one. I don't think that is disingenuous. It will obviously depend on the individual financial circumstances and local competitive position of a specific school but it is credible that this could happen.

“They are trying hard to make it go ahead. Currently at consolation stage. The "black hole" announcement was to include bringing this forwards from Sept 25 to Jan 25”

Well state schools are sure to have a black hole in their budgets once the ex private school lot arrive en masse in Jan 25.
Very amateurish!

Given Brexit went ahead despite it making zero sense, I wouldn’t put it past them to implement this just as blindly and catastrophically as the Tories did Brexit.

It is completely disingenuous because Labour don't say "obviously that will differ for each individual school" they say "schools don't have to pass on the full amount of VAT onto parents". They craft their words carefully and they avoid meaningful debate or scrutiny of the policy.

I can't see that it is disingenuous to say that schools don't have to pass on the full amount of VAT on to parents. The most likely outcome is that many schools won't. Okay Labour didn't qualify that with the statement that it will differ for each individual school but that is pretty obvious that each school's pricing policy is their decision and reflective of their own financial and competitive situation. I genuinely can't see what is wrong with that statement.

The not engaging with the sector and just listening to your own dogma/voice/semantics is very Oxford Union politics. It’s also probably why this country is going to the dogs. Run by people who have been told they are clever and think they know it all and have been educated to argue and think like that.

I care. I hate to see young people's dreams crushed and hard work and talent wasted. 😢

Yes, Labour have described it badly. Schools will be forced on every invoice to put 20% VAT. They could of course reduce fees by 10% or 20% or 30% and then add VAT to that but it is more likely they have to increase fees because of business rates which may be eg £100,000 for the school being added too in this politics of envy move by Labour (which is by the way quite popular).

I hope a legal challenge can go ahead. It will need to be done by one of the main private school bodies and with very good lawyers.

Unfortunately the Labour Party don't care about children's futures or the disruption to their education. They ought to be ashamed of themselves. Those parents who have access to large amounts of capital and who have pre-paid fees have managed to avoid the VAT by the look of the draft legislation. As many of us have said, it's not the wealthiest who will be hit hardest by this.

Our school has already published its fees for 24/25 and sent out the usual ass-covering letter from the Board of Governors explaining the fee rise. Can't very well back down and say 'well, actually we could afford to charge 10% less ...'

the very linking of private schools with state school funding in anyway is misleading

I've been struggling to put my finger on why this bothers me.

I've realised that it's because by linking the two, they're implying that private school funds and state school funds come out of the same 'pot'. And that private schools have been unfairly taking more than their fair share.

Which is of course completely misleading. Private schools don't take any money at all from the state 'pot'. By definition, they're entirely paid for by the parents, with zero contribution from the state. There is no link between the two.

It feeds the left wing world-view that all of the population's money and effort intrinsically belongs to the state. In consequence, they see no difference between the state giving someone state funds versus allowing someone to keep their earned income. Whereas I see those 2 things as very different. We're autonomous human beings. We do contribute into the government through taxes, but that's because we want a working society, not because the government is entitled to everything we create, only leaving us a portion through largesse.

That's exactly what the argument is. They claim that government has a right to tax ALL spending by default unless there is a very good reason for the exemption. The fact that education is a public good and there's no profit to be made from it isn't a good enough argument, in their opinion. The state has provided a good enough education for every child and so there's no reason for people to be spending any portion of their income on education without attracting tax.