A legal challenge brought by a group of private schools against the Government’s decision to remove the VAT exemption on school fees has been dismissed by the Court of Appeal.
Lawyers acting for families connected to low-fee faith schools argued that the policy was discriminatory and breached human rights law. However, senior judges rejected the claim, stating that parents who object to state education have the option of home schooling.
The schools are now expected to seek permission to appeal to the Supreme Court of the United Kingdom.
The VAT policy came into effect on 1 January 2025. The Government has previously said the measure would raise £1.8 billion a year by 2029/30, funding additional teachers in England’s state schools.
Last year, three separate claims were brought before the High Court by families of children with special educational needs and disabilities (SEND), pupils attending single-sex schools and families connected to low-paying faith schools.
Although the High Court acknowledged that the VAT change would have a negative impact on some groups, including children with SEND and those attending faith schools, it ruled that the broader public benefit of increased funding for state education outweighed those effects.
The group representing low-fee faith schools subsequently appealed.
Dismissing the appeal on Friday, Sir Geoffrey Vos, Lord Justice Singh and Lady Justice Falk accepted that the VAT measure could have “a serious impact” on families unable to afford private education aligned with their religious beliefs.
“But it is important to bear in mind that they have the option of home schooling if free education in the state sector is not acceptable to them,” the judges added.
Government lawyers had argued throughout the case that parents remain free to educate their children privately or at home if they choose not to use the state system.
Speaking before the ruling, Caroline Santer, head teacher of a small private school in Hampshire, said: “It’s important for my parents to see that I’m prepared to take a stand and fight. No other country taxes education in this way.”
Andrea Williams, chief executive of the Christian Legal Centre, said the group would continue its legal campaign.
“Not everyone can home educate,” Williams said.
The decision marks a significant setback for private schools challenging the removal of VAT relief, as debate continues over education funding and the balance between state and independent provision.