School fees, SEN children education and divorce: our 2024 perspective
Two major stories have hit the headlines in the past month that overlap two core services of our family law practice, namely:
- The addition of VAT to school fees
- The number of SEN children missing out on education
School fees and VAT
The new Labour government have delivered on their manifesto pledge and added VAT to private school fees from the start of 2025.
“We’re ending tax breaks for private schools from the start of 2025, to better invest in state education. Currently, private schools are eligible for tax breaks, like charitable business rate relief, and they don’t have to charge VAT on tuition or boarding fees.“
The rise in school fees of 20% is therefore just one term away for the parents of almost 570,000 children who are educated in fee-paying UK independent schools.
School fees and financial settlements
School fees are fundamental to many divorce financial settlements we create. As we stated in a previous blog:
“Private schools provide more than just a first-class education. During a separation and subsequent divorce, it is a great help if your children remain in a supportive and consistent school environment. Moving to a new school, private or state, will inevitably involve disruption, distress and loss of social contacts at a time when so much else is changing in their lives too. That’s why many parents prioritise the payment of school fees in their financial settlements.”
According to the Institute for Fiscal Studies, adding VAT to private school fees will raise between £1.3 and £1.5billion to fund state education. Also, the government does not anticipate that private schools will apply the full 20% rise and will “try to minimise any fee increases.”
However, it is becoming increasing apparent that much of the VAT costs will be added to fees by the independent schools. This could leave parents to find an estimated additional £28,000 for a secondary education. According to MoneyWeek:
“The average fees for a private secondary school over seven years are likely to cost a total of £140,552, with 3.5% annual inflation factored in. However, if the 20% VAT hike is passed on to parents, it could push up the seven-year bill to £168,633.”
The VAT rise will also apply even for those who pay fees in advance, as fees paid which cover the term starting in January 2025 will be subject to VAT.
For more on school fees and VAT, see our previous blog.
School fees and SEND children
Any rise in school fees will be a major worry for parents of SEND children. A third of special schools are independent, and 5% of pupils with an Education, Health and Care Plan (EHCP) are educated privately. In addition, the Independent Schools Council (ISC) reported that 100,000 students in ISC schools receive additional support without having an EHCP.
As we explained in our recent blog on school fees and VAT:
“The proposed VAT application will be of particular concern to parents whose local authority funds their children’s school fees under their Education, Health and Care Plan (EHCP). Cash-strapped local councils may no longer be able to offer full payment or decrease partial payment of the fees that would be set to rise by the current rate of VAT at 20%.”
By law, local councils must provide for the needs of any child with an EHCP. However, their budgets are being stretched by a rapid rise in the number of EHCP plans, up 26% last year alone.
A report by Children's Commissioner Dame Rachel de Souza reveals that:
“Children with SEN make up 22% of the 2,900 children not enrolled at a school or being suitably educated elsewhere - which is disproportionately high, as 16% of children in state education have SEN.”
In addition, 41% of parents with SEN children surveyed by the charity Support SEND Kids, had left their jobs to try to get their children’s legal rights to support in place.
This system puts increasing pressure on parents of SEN children. In the absence of local authority funding, the private school sector may provide the only means of support available in their area, and at considerable financial cost to the family. If parents of SEN children then separate, it is crucial that their divorce or separation financial agreement includes sufficient funding for an independent school education, as well as the additional costs of raising and providing for a SEND child.
For more on this, see our three-part video series “Divorce and the SEN child”, or contact us for your initial fixed fee consultation.
Legal action against VAT on school fees
Various individuals are looking at legal action to force the government to reverse the policy of VAT on school fees. The BBC reported that Alexis Quinn, whose daughter is autistic, is raising funds for a legal challenge in the High Court. She will argue that “the policy breaches children with special educational needs' right to education under the European Convention on Human Rights.”
School fees and financial settlements: we can help
If you are separating (or planning to separate) and have concerns over funding school fees for your child, contact us. We offer a reduced fee 60-minute initial consultation when you can discuss your specific circumstances and receive valuable legal advice.
To book your consultation: