Roger Kiska, Legal Counsel to the Christian Legal Centre, explains the legal arguments made in court on behalf of Christian schools, in the crucial VAT case this week.
This past week, the High Court, sitting with 3 judges, heard the judicial review of the government’s imposition of VAT on private schools. The Speaker of the House was also added as an interested party. The Christian Legal Centre is supporting 11 Claimants in the challenge: 4 small Evangelical private schools, 4 parents whose ability to continue to send their children to their Christian private schools has been put in serious jeopardy because of the tax, and 3 children currently attending private Christian schools (one of whom has special needs and requires an Education, Health and Care Plan).
The High Court provided no indication of when a judgment would be delivered. The 3 days scheduled for the rolled-up hearing did not suffice, which now requires the parties, including the Christian Legal Centre supported Claimants, to provide some of their submissions and rebuttal in writing. The High Court may, at its discretion, still order a further hearing.
History of the tax on private education
The imposition of VAT on private schools began life as a measure passed immediately without any objection by the House of Commons following the Chancellor’s Budget speech. It was confirmed on November 6th 2024, following a very short debate, by a vote of the House of Commons. Pursuant to the provisions of the Provisional Collection of Taxes Act, the measure had provisional statutory force until the passage of the Finance Bill (which has now received royal assent). Private educational fees were subject to a VAT exemption found in Schedule 9 of the Value Added Tax Act 1994. None of the other 46 Council of Europe Member States impose VAT on private education and the European Union, of which the UK is no longer a member, mandates tax exemption by way of the VAT Directive.
Legal basis for the claim
The United Kingdom is one of the few members of the Council of Europe that has directly transposed the European Convention on Human Rights into its domestic legislation. This was done through the Human Rights Act 1998.
- 3 of the HRA requires that “so far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.” This applies to all new primary or secondary legislation, which covers the proposed VAT and business rate changes.
- 4 allows for a judicial review of legislation to ensure its compatibility with the Convention. Should the legislation be failing in this regard, the High Court may issue a declaration of incompatibility.
The claim
The Claimants are seeking a declaration from the High Court that the government’s VAT raid is incompatible with the European Convention on Human Rights. They are also seeking a separate declaration that the use of the Provisional Collection of Taxes Act to impose VAT on private schools was unlawful, in that Parliament never intended to confer a power which fundamentally impacts on human rights to escape the regular level of parliament debate and scrutiny.
The Christian schools and families involved are arguing that: (1) the tax is discriminatory towards Christian parents who choose private education; (2) the tax breaches Protocol 1, Article 1 of the European Convention on Human Rights (the right to property); (3) VAT imposition is incompatible to Protocol 1, Article 2 of the Convention (right to education); and (4) Parliament does not have the legislative authority to impose VAT on private schools vis-à-vis the Provisional Collection of Taxes Act.
Discrimination
Within the United Kingdom, there are different types of independent schools – even different types of faith schools. The primary differences relate to funding arrangements, organisation of the curriculum and government control. While many Church of England and Catholic schools are to some extent maintained by government funding, other Christian and private schools 100% fund themselves without taking any government monies. It is this category of school, the kind that costs the taxpayer nothing, which the government is seeking to tax.
The benefit of not receiving government funding is that private Christian schools can recruit their own teachers, they are not bound by the national curriculum, they typically have inspectors other than Ofsted, they can implement mandatory worship, and they can give preferential admission to people who share the Christian beliefs and ethos of the school. Precisely stated, private Christian schools are able to maintain their uniquely Christian character in a way that faith schools who receive government money cannot. This is what makes these schools attractive to parents who genuinely wish to give their children an authentic Christian education, so much so that they are willing to pay the fees necessary to have their child educated in a manner consistent with their beliefs.
The fact that the government is taxing only these types of faith schools, and not those it funds and therefore has more control over, is clearly discriminatory. This overarching discrimination effects all the claimants involved in the claim.
Protocol 1, Article 1 (P1-1)
P1-1 of the Convention prohibits the government from taxing businesses or people in a way which is discriminatory, disproportionate and lacking in fundamental fairness. To be clear, what the government is doing is not removing a subsidy. They are imposing a tax on education: in fact, the first tax on education in the history of Europe since the introduction of VAT.
The result of this tax is that some private Christian schools will be forced to go out of business, others will face extreme hardship and have to make serious cutbacks, while yet others will have to cancel existing plans to expand. The tax also means that some parents will face extreme hardship in continuing to send their children to their private schools, while others will no longer be able to afford the fees at all.
Apart from this disproportionate and burdensome imposition on these schools and families, the tax is fundamentally unfair. It affects only certain categories of independent schools, and more than that, it was done so quickly and haphazardly that many families and children are at risk of having their entire school and private lives upended, including having to change schools with almost no notice.
What is perhaps most uphauling is that, as internal government documents reveal, Labour knowingly chose the ‘most disruptive’ time for the VAT raid, on the basis that starting from January would maximise revenues. The government’s own legal submissions to the High Court admitted that they were fully aware that their actions would lead to some families, including Christian families and children with special needs, no longer being able to pay tuition and being forced to leave their school:
“In the present context, Parliament was aware that some families would no longer be able to afford private school fees as a result of ending VAT exemptions for private schooling…It was also aware that this group would include children with SEN, pupils from families with religious convictions or with desires surrounding single-sex education… Parliament judged that the revenue to be raised for public services – including State education – justified these hardships, and moreover that it was fairer overall to require those wishing to make use of private education to no longer be exempt from paying VAT for that service.”
Protocol 1, Article 2 (P1-2)
P1-2 of the Convention provides a 2-prong right: the right to education (a right which belongs to the child) and the guarantee that the state will respect the manner in which parents wish to raise their children (a right which belongs to parents).
As highlighted above, Christian private schools are able to offer a genuinely Christian education in a way that even independent funded faith schools cannot. Navigating statutory RSE in a truly Christian-friendly manner, for example, is largely only possible now in private schools. Beyond this, parents are comforted by the fact that their children are learning from teachers with the same belief system as their own, and that the curriculum and collective worship will all be geared towards spiritual development.
By making these schools unaffordable and forcing children to attend maintained schools or to home educate, the government is undermining the fundamental right parents have to raise their children in accordance with their own religious beliefs. The children themselves, some of whom, because of their own Christian beliefs, or those of their parents, feel unable to attend a maintained school and chance the progressive education they may be exposed to. As a result, these children are deprived of their right to receive an education within the meaning of P1-2.
The Provisional Collection of Taxes Act (PCTA)
Lastly, the Claimants are arguing that the PCTA was never intended to give the House of Commons such unfettered discretion in imposing novel and burdensome taxes without proper legislative scrutiny and debate. Certainly, it was never the intention of Parliament to pass a law allowing the House of Commons to impose taxes which undermine fundamental human rights.
Conclusion
The right to start and run private schools is a protected human right under the Convention. By extension, the ability to attend a private school is also a Convention protected right. While the government has no obligation to subsidise private education, it cannot interfere with that right by imposing burdens, such as the unprecedented VAT raid, which disproportionately affect it.
The outcome of this case will have significant implications for both parental rights and the legislative safeguards that are in place to protect UK citizens from perverse and unfair taxation. Win or lose, this naked attack on private school families, and their knowing disregard for religious minority and SEN pupils, is a black eye on the current government which will remain for years to come.
