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.

Military (and other qualifying government roles) don't need an exemption.

That can easily be dealt with by change to the CEA ceilings.

It is relevant, because of the need for tax harmonisation across the board.

Outside the EU, then differing sales tax doesn't matter.

But for free movement of goods and services, you need harmonisation across all goods and services.

And this policy represents a step away from that.

It’s not just about trade. He has said “Most of the conflict with the UK being outside of the [EU] arises in so far as the UK wants to diverge and do different things to the rest of our EU partners. Obviously the more we share values, the more we share a future together, the less the conflict”

But this has nothing to do with trade.

Thats the only closer relationship there is.

Greece is still in the EU and is bound by EU law. Britain no longer is. M

How does this affect trade? It doesn’t.

It hasn't been "held up once"

It was impossible then because UK could not impose VAT on an EU-wide exempt item whilst a member of the EU. There is no precedent that is relevant to post-Brexit arrangements.

I can see why those strongly opposed to this policy might be misled into missing that key point.

So your argument is that I don't agree with you because I'm dumb???

That is incorrect. The majority of people using private schools pay a disproportionate amount of tax. Our household paid over 100k income tax last year. The issue is one of fairness. Why should I pay even more tax when households on similar salaries who use state schools will then pay less than me. If money is needed for state education it should be raised through income tax.

That’s really interesting-he knows his stuff.

So I'd suggest that private schools only launch a challenge if they're keen to generate interesting caselaw and large legal fees.They will likely lose any challenge, and even if they win, their prize is a certificate they can frame, not a change of law.

😁 I am ambivalent about the policy. Would rather see wealth taxes prioritised. But reading people lose their minds about it on MN does give me a wry smile.

Why income tax?

Pannick has a bit of a track record of coming up with hopeless right-supporting legal arguments. Notably he tried to argue that the Privileges Committee could not inquire into Johnson's shenanigans, and a first year law student could drive a truck through the holes in his arguments. I doubt that Starmer is worrying too much about this one.

Because that is "fair" to use Labour's language. The whole of society benefits from a well educated population and most people use state schools therefore we should all shoulder the burden of increased funding. Not the % who already save the state over £40 billion per year at the same time as paying taxes.

I dont want to leave the ehcr and that risk is why I won't vote Tory. But that doesn't mean I have to agree that the labour party have considered the impact on sen or even grasped it.

There's an obvious problem in relying on a 1987 legal opinion 37 years later, namely that it may get superseded by other legislation and case law. The Education Act 1996 set out the duty of local authorities to ensure that there are adequate suitable school places for all children in their area, which would seem to militate against this being a breach of the right to education. There has also been case law saying in effect that the right to education isn't breached by not being in the school of choice. Telegraph failing to fact-check yet again.

Unlike the Telegraph, Labour probably worked out that that the law and circumstances change over time.

They've said that children with EHCPs will be exempt.

Because that is a fairer system to support a wider societal benefit. It will still mean that private school parents subsidise the state sector however the burden will be split a little more fairly.

The proposed system will result in some lower earning families being hit with an additional tax which benefits other families who have way higher incomes and access to an outstanding state school. That doesn’t feel right to me.

If you want fairness and people to pay their way then why not impose a £300 per child per month tax increase on those higher earning families who use outstanding state schools?

Around 95% of the SEN children in private schools don’t have an ECHP in place. Has Labour calculated the cost and logistics behind assessing 100,000 additional cases in a few months when currently it takes several years to complete the process for a tiny number of children?

The majority of SEN in indi schools don't have EHCPs however this has now pushed many parents to seek an EHCP, at cost to the state. So for all of those parents the state is now paying for THE EHCP but won't get a penny out of them for VAT.
If Labour had been bothered to engage with indi schools and parents they may have realised that it is a much more complex sector than they first thought. But they didn't so it is now a complete mess.

Problem is if the families that are exempt under this policy send their children to small, cheaper private schools, there is a risk that it is these sort of private schools may go under due to other families taking their children out due to price increase. So where do they send their children to then?

If it usually takes years to process, why would it need to happen quicker now? Wouldn't those 100 000 just take their place in the queue?

The obvious hole in that one is that it is based on the right to plurality, i.e. to choose different types of education. There is nothing in Labour's proposals which will take away from that right, as they are not abolishing private schools. It is simply the case that parents will probably have to pay more - and even that is uncertain since many schools are rearranging their fee structures and reducing fees to mitigate this - and some will be unable to afford to pay. If the plurality argument is engaged in relation to VAT because some parents will be unable to afford to pay it, how does it work in relation to parents currently who would like their children to go to private schools but can't afford it?

Most children with SEND in mainstream state schools don't have an EHCP either.

Struggling to understand your logic here. Are you actually saying that parents who pay for private education are not "paying their way" unless they pay an additional 20% to the government on top of what they already pay to the school? What are your thoughts on scroungers like me who had 3 kids in state school 😱

Thanks for this.

Remember when the Telegraph used to be a serious newspaper and not an outlet for desperate Tories?