PS VAT - international reaction

[AlbionLass]

France and Germany attack UK plan to levy VAT on international school fees
Proposal to impose value added tax in the Budget risks damaging diplomatic ties, ambassadors say.

France and Germany have hit out at Sir Keir Starmer’s plan to levy value added tax on private school fees, saying the policy risks forcing hundreds of children out of international schools and damaging diplomatic relations with the UK.

I wonder how this will square with wanting to be closer to the EU?

How can you issue the letter before action before the new Finance Act?!

As mentioned, IANAL.

But I was wondering why you thought the case would be heard before 20/12 so I had a Google for the current situation

@SheilaFentiman - the case has to be heard promptly. Otherwise there is massive uncertainty for private schools. They need to be able to issue the invoices in accordance with the law.

The Government has been told the letter before action is coming - so I would assume they are going to prove to us all how prepared they are and that this is a simple tax matter. As that is what has been sold to us in their Manifesto.

@SheilaFentiman - I was assuming nobody wants this case to have to be heard as an emergency over the vacation period in the High Court? When clearly the Labour Party is so in control and has had a plan all along.

There isn’t, as outlined above by the lawyers on the thread.

The VAT change comes into place in law sometime before 1 Jan, effective from 1 Jan, and private schools charge that VAT. No uncertainty.

If legal action means the VAT provision is amended later, then schools behave in line with the amendment at that time.

I am not sure why you are so insistent that something else is true?

I am not being insistent. I am wondering if Pannick is going to go for a stay/interim injunction. If the case takes 18 months then even if the children with SEND win on human rights grounds, their win is rendered academic by the delay in the judicial system because many parents cannot afford the extra fees.

On that basis, I am wondering if they have any prospect of getting an interim injunction/stay. The Government cannot demand upfront damages from those parents to compensate the Government either because the whole point is that they cannot afford the extra. Same applies to some kids in Year 11 and Year 13, in particular.

It is the Labour Party that have chosen this timeline and to do it this way so I better hope their legal advice is completely watertight. That is all.

“the case has to be heard promptly.”

“nobody wants this case to have to be heard as an emergency over the vacation period in the High Court”

“there will be zero problems defending the judicial review claim in full in December before the courts close on 20 December”

Your phrasing is certainly insistent, IMO. YMMV, of course.

Well Sir Keir managed to get a whole lot of protesters locked up and others released pretty promptly last summer. So one would hope his great expertise in court and HR law matters will be applied promptly to give the whole private school sector and any children with SEND in it very prompt and professional attention too, even if it means working over the December period. He did it for criminals and owes it to children with SEND.

OK, @Araminta1003, I am done.

You are darting round from point to point, refusing to acknowledge a difference in impact between deporting people to Rwanda and a somewhat lower standard of education for a child with SEN. Pretending that you think the PM is personally involved in legal cases. Imagining that using current criminal law promptly and correctly is the same as hearing a nuanced legal challenge to a new law on taxation.

I don’t think you are ignorant. So I can only presume you are posting in this way to provoke. I will therefore leave it there and not respond further.

“Refusing to acknowledge a difference in impact between deporting people to Rwanda and a somewhat lower standard of education for a child with SEN.”

Really @SheilaFentiman? - I do hope the Labour Party do not make such an argument in court.

For some children with SEND private school was the only option. Not an actual choice. And definitely not a question of a “somewhat lower standard of education”, more like a lifeline!

This is not about provocation. I am simply stating matters which are reasonably foreseeable so I do hope they have reliable evidence and answers for all of the points I raised. It is called being prepared.

I found this interesting, on the subject of the risks to life, safety and security posed by the former Rwanda policy.

migrationobservatory.ox.ac.uk/resources/commentaries/qa-the-uks-policy-to-send-asylum-seekers-to-rwanda/#

The press ran a story a few days ago stating the entire Tory Cabinet knew the Rwanda scheme would fail! (And that was according to one of their own Jendrick).
Let’s hope the same does not apply to the VAT on private schools and the business rates for private schools with charitable status, namely that they knew all along this is a dude, would be challenged in court and is unlikely to ever be implemented. And was just red meat thrown to the left in their parties, at huge expense to parents of children with SEND, teachers and numerous others in the private sector.

“Lord Pannick KC seems to have been involved in pretty much all the controversial big cases of this nature in recent history. I doubt someone of his standing would take on such a case without a reasonable prospect of success. I also highly doubt the Government did not expect something like this all along.”

Barristers have a professional conduct rule know as the “cab rank rule”. It means that they must take on a case if it is in their competence, if they are available and if they are properly remunerated. They are no allowed to discriminate and take on only those cases they think they’ll win.

As to the timing of any judicial review, it is possible to expedite cases and get them heard urgently provided you can justify this. This is what the applicants in the Sinclairs Law challenge (Alexis Quinn plus two anonymous parents) had said they would do once the VAT proposals were confirmed in the budget.

Sorry for typos, it won’t let me edit it.

Yes I think as soon as the budget is law in the Finance Act the legal challenges will go in. It is in everyone’s interest to get certainty before January to the extent possible in the impossible timeframe the Labour Party have inflicted on the private sector. So one would hope they are getting their ducks in a row so that can occur.

They don't have to wait until the Finance Act is passed. VAT for independent schools will initially be brought in via a resolution in parliament giving provisional statutory effect to the changes under the Provisional Collection of Taxes Act. The wording of the relevant resolution is already available and will be identical (or very nearly so) to the relevant provisions in the Finance Bill when that is published.

However, the ISC doesn't even have to wait until then. As we saw during Brexit, people can bring legal cases against the government's announced plans before they become law.

As @TheWrongBus says, the fact the ISC have Pannick on board doesn't tell us anything about the strength of their case. Pannick may think it is completely hopeless, but he is still obliged to take it on if the ISC wants him and is prepared to pay his normal fee.

@prh47bridge - “the fact the ISC have Pannick on board doesn't tell us anything about the strength of their case. Pannick may think it is completely hopeless, but he is still obliged to take it on if the ISC wants him and is prepared to pay his normal fee.”

Surely Pannick will have provided provisional legal advice and they will have voted with the backing of private schools. If they are potentially going to incur substantial legal fees if they lose (and to pay for a heavyweight), do you really think they will be going ahead with a claim on that basis? It is just not how private schools governed by volunteer governor’s primarilym often with substantial professional reputations, work? And charitable status and the obligation to spend funds wisely? Sounds very unlikely that they have not been given advice by Pannick himself that they have a reasonable chance of success at the very least.

And I am going to assume someone like Pannick KC will be advising them exactly on the perfect timing to have reasonable success to achieve an interim injunction and stay.

Would part of his advice not be whether they have a decent case worth the expense?

Yes, but it is by no means unknown for the client to ignore counsel's advice and proceed anyway. The counsel who told them they had no chance must then do his/her best to win the case for them.

We have no idea what advice Pannick provided. Given that this is an existential threat for some schools, they may feel they have to go ahead with a challenge however poor the prospects of success.

We don't know, but that includes your posts? Do you feel it was the case given the existential threat

We can't know either way

You’re quite naive. Most businesses like that would take your payment in cash and not declare it so 1) no VAT paid 2) no income tax or corporation tax paid. Labour has nothing better to do than to double tax working people ..

But that wasn’t really the point, was it? No one pays school fees in cash, and if a business is VAT registered, it has an obligation to collect VAT and can’t just leave it to HMRC to do so. that was the point Koala was illustrating.