Parents lose school VAT challenge

Children, parents and private education providers brought a judicial review against the policy change, given legal effect in the Finance Act 2025, claiming fees would be unaffordable, children would leave, and schools would be financially unviable. Some of the claimant children have special educational needs (SEN), or adhere to a particular religion. They argued the policy breached their European Convention Protocol 1, Art 2 right to education, Art 14 right not to be discriminated against in the enjoyment of their rights, and Protocol 1, Art 1 right to peaceful enjoyment of possessions.

The Treasury countered the tax change was a manifesto commitment, projected to bring in £1.6bn each year for state education. It justified its decision not to allow exemptions on the basis it would diminish revenue collected and be unfair, unworkable and administratively onerous.

The court rejected the challenge on all grounds, in R (on the application of ALR (by their litigation friend ASG) and others) v Chancellor of the Exchequer and others [2025] EWHC 1467 (Admin) .

It held free state education remained available, therefore the right to education was not breached.

The court held the policy did interfere with the claimants’ Convention rights, but the government had ‘a broad margin of appreciation’. This was because the considerations ‘fall squarely into the fields of economic or social strategy’, the Chancellor has a legitimate aim of raising revenue, ‘it was a manifesto commitment… debated in Parliament… the debate included consideration of the extent to which the measure would raise revenue, the effect of the measure on children with SEN, the position of children attending faith schools and the timing of the measure’.

Sophie Kemp, partner at Kingsley Napley, representing the claimants, said the decision was ‘disappointing.

‘The court felt that it was not able to interfere because of the leeway it must give to Parliament. Unfortunately, this doesn’t help the claimants.’

Abigail Trencher, head of education at Birketts, said: ‘This outcome will be a big blow to independent schools. The claims have, however, highlighted the depth of feeling on this issue.’