The Court of Appeal has dismissed a claim that the government’s levy of VAT on private school fees – which came into force last year – disproportionately discriminates against Charedi Jews.
An Orthodox family whose son attends an independent Jewish secondary school joined a group of evangelical Christians in taking their case to the Appeal Court, arguing that the new tax policy could make the religious education they wanted unaffordable but that there was no equivalent provision in the state system.
The government hopes to raise £1.5 billion towards investment in state education through the VAT charges.
But the claimants argued that the tax on fees could prompt the collapse of some small religious independent schools.
The parents of the Charedi boy “have low incomes and receive universal credit. They have little or no savings,” the three judges said in their decision issued at the end of last week.
“There are no state-funded Charedi secondary schools for boys in their area. A secular state school is not considered by the parents to be a viable option.” The father was “also concerned for the safety of his child and the likelihood of antisemitic abuse against him”.
The government had considered proposals for exempting small faith schools from VAT but the Appeal Court found that it had provided “reasonable and objection justification” for not accepting them.
One idea had been to exclude schools that charge fees below £7,690 a year (the cost of educating a pupil in the state system). This would have covered around 250 small schools and cost the Treasury around £30 million.
But the government believed implementing this would “be unfair to schools just above the threshold and create tax avoidance opportunities that would be difficult to police,” the court said.
The government also took the line that “state schools… are suitable for all faiths and none”.
Susan Whitehouse, a deputy director at the Department for Education, explaining why the exemption proposals were rejected, told the court: “ One option for a school to abuse such a system would be create an expectation of ‘voluntary donations’ alongside fees from parents (and potentially not admit children whose parents did not agree to make such donations in advance).
“Such behaviour would be hard to identify as the Department does not monitor (or substantially regulate) private school admissions.”
In its original decision, the High Court had said: “Although the cogent evidence of the likely effects of the measure on Charedi Jewish families concerned us, and despite our sympathy for the families whose circumstances were in evidence before us, we have concluded that the decision not to create a legislative exemption covering their cases nonetheless fell within the margin of discretion which must be afforded to Parliament in the circumstances of this case.”
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