VAT on private school fees — a warning for separated parents and children with special educational needs

Significant changes and disruption to the private school system seem inevitable following the Government’s announcement that VAT on private school fees will apply from January 2025 — with the cost expected to be passed onto parents and carers.

Here, Amy Harris outlines why separated parents and those with children who have special educational needs may need to take decisive action.

Warning for separated parents

The addition of VAT on school fees may stretch family finances, especially during the cost-of-living crisis. There will also be a concern for some separated families, where a parent may be obliged to pay school fees as part of a court order. This would render them liable for any additional cost.

Some schools and parents have acted quickly and paid their school fees in advance. However, that loophole is now closed (as of 29 July 2024). We’re yet to see the precise details of the legislation and whether a payment on account by parents would be sufficient to negate the additional tax liability, given that some fees won’t already have been invoiced. 

Disproportionate impact on special education

The reforms may have a disproportionate impact on many parents who have children with special educational needs, as many specialist schools are private. 

However, it’s anticipated that where a child is required to attend a private school to access the support they need, some compensation may be available, since that support is lacking in the state sector.

Advice for parents with court orders

If a court order is in place and a parent can no longer afford to pay those fees, it’s important to discuss matters with your former partner to see what options there may be for funding. 

Ultimately, if private school fees become unaffordable as a result of the changes, it may be necessary to seek a variation of the school fees order. It’s ill advised to simply stop making payment in accordance with a court order, as a breach of the terms could result in arrears accruing and enforcement action being taken. Failure to comply with a court order can also be considered contempt of court, which is a criminal offence. 

A variation of the court order could result in the current order being changed, which may mean that the cost of school fees could be shared between parents. If there’s a concern about your ability to meet school fees — whether through a school fees order or more generally — it’s advisable to take legal advice on your options. 

Disputes over schooling

Some parents may need to take the difficult decision to remove their children from a private school and attend a non-paying state school instead. 

If there’s a dispute as to which school a child should attend, this is an issue that can be resolved through an alternative (non-court) dispute resolution method, such as mediation or arbitration. Alternatively, it may also be resolved through court proceedings. 

Any decision regarding schooling should be made with the child’s best interests front and centre. However, where this dispute concerns a private school, the court is unlikely to make an order for a child to attend a private school if it’s satisfied that there’s inadequate funding to achieve this.

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