The judgment in ALR and others v The Chancellor of the Exchequer landed this week, and with it comes legal confirmation that the Government’s plan to impose VAT on private school fees is not just political rhetoric – it is legally sound too.
The challenge was always going to be ambitious. Claimants were trying to stop one of the most high-profile tax measures in recent political memory, passed in the Finance Act 2025, from being implemented. But their argument wasn’t about whether the policy was popular, fair, or affordable. It was whether it breached the law – specifically the European Convention on Human Rights.
Spoiler: it didn’t. The court dismissed the claim. But what the case does do is bring into focus the tension between human rights law, tax policy, and education in modern Britain. So let’s break it down.
What’s the legal background?
In its 2024 manifesto, the Labour Party promised to remove the VAT exemption on independent school fees. The measure was introduced via the Budget Resolution on 6 November 2024, and formally enacted in sections 47 to 49 of the Finance Act 2025.
This means that from the relevant implementation date (which wasn’t in force at the time the claim commenced), independent schools will be required to add 20% VAT to their tuition and boarding fees.
This is a significant shift. Previously, private school education was treated as an exempt supply for VAT purposes. The change effectively increases the cost of private education by one-fifth overnight.
The Government has said the measure will raise an estimated £1.6 billion annually, which it intends to spend on improving state education – as an aside, that is and was demonstrably rubbish, but that’s a personal view as much as anything.
Who brought the legal challenge – and why?
The claim was brought by a range of parties, grouped into three categories:
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Children (and their parents) currently attending private schools, who feared they would no longer be able to afford the fees once VAT was added.
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Private schools and their operating companies, some of whom said the VAT charge could threaten their financial viability.
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Children with particular educational needs, such as those requiring special educational provision, single-sex education, religious schooling, or international curricula. They argued that the lack of exemption would discriminate against them, as they could not easily access equivalent state-funded provision.
The claimants argued that the new law breached their rights under the European Convention on Human Rights, including:
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Article 2 of Protocol 1: the right to education
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Article 14 (read with Article 2): the right not to be discriminated against in the enjoyment of rights
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Article 1 of Protocol 1: the right to peaceful enjoyment of possessions (used particularly by school operators and those funding school fees)
What were the main legal arguments?
The key legal questions before the court were these:
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Does the VAT policy impair the “very essence” of the right to education? That is, does making private school more expensive make education effectively inaccessible for some children?
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Is it a disproportionate interference? Even if the policy has a legitimate aim (raising revenue to fund state schools), are the means chosen disproportionate given the impact on some children and families?
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Does it unlawfully discriminate? Particularly against pupils whose needs or backgrounds make private education the only viable route for them.
What did the Government argue?
The Government made several core points in its defence:
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Raising revenue is a legitimate aim, and Parliament is entitled to decide how to fund public services, including through tax changes.
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Removing the VAT exemption was a policy decision, designed to raise money from families who can afford to pay for private schooling and redirect it to benefit the state sector, which educates the vast majority of children.
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There are existing protections for vulnerable children. For example, pupils with an Education, Health and Care Plan (EHCP) naming a private school will continue to have their fees (including VAT) funded by local authorities, who can reclaim the VAT.
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No exemption was made for particular schools or pupils precisely because doing so would make the system more complex, invite abuse, and reduce revenue.
What did the court decide?
The court rejected all grounds of the claim. Here’s a summary of its reasoning:
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Right to education not breached
The court accepted that the new VAT charge may make private school unaffordable for some families. But it emphasised that the right under Article 2 of Protocol 1 does not guarantee a right to any particular form of education, only to an effective education.
Because the state continues to provide a free and comprehensive school system, the essence of the right was not impaired. The fact that a child might have to leave a private school does not, in law, amount to a denial of education.
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Interference was proportionate
The court accepted that the policy interferes with Convention rights. But it said the interference was justified. Parliament had a clear, legitimate aim in mind (raising revenue for state education), and the design of the measure – including the choice not to allow carve-outs – was within the “margin of appreciation” allowed to democratic governments.
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No unlawful discrimination
On Article 14 (discrimination), the court was sympathetic to the claimants’ individual circumstances – particularly children with special educational needs or religious requirements. But it said that even if these groups were treated differently in practice, the policy was applied equally in law and had a rational foundation. Again, the interference was justified by the wider public interest.
So what does this mean in practice?
In short: the policy is lawful. Unless something changes politically, VAT on private school fees is here to stay (at least while Labour are in charge).
Parents, meanwhile, will be doing their own sums. For many families, 20% extra is manageable. For others – especially those just on the edge of affordability – it may mean a change of plan.
Some families may look for cheaper schools. Some may seek scholarships. Others will return to the state sector.
What’s clear is that the case is a legal green light – not a shield from the economic impact.
A few legal reflections
This case was not about whether private schooling is good or bad, or whether parents “should” pay. It was about legal limits on Government policy, and indeed whether the Court’s should be reviewing Governments’ policies.
And as the court made clear, those limits are high. Taxation is one of the areas where courts are least likely to intervene, especially when Parliament has spoken clearly. The court’s role was not to re-weigh the policy merits
What’s interesting here is the way human rights law is being tested in fiscal contexts. The claimants had a genuine case to argue: this is a change that affects real lives, especially those on the margins. But ultimately, the court said that some disruption to private expectations is not unlawful if the broader public interest justifies it.
Final thoughts
The High Court has confirmed that the VAT change is a matter of politics, not law. But as any good lawyer knows, that’s not quite the end of the story.
Even if the policy is lawful, it raises profound questions about access, fairness, and choice in education. Those conversations will continue – in schools, in families, and no doubt in Parliament too.
In the meantime, if you are a school, a parent, or an educational charity navigating the VAT changes, I’m happy to help with practical advice, legal structuring, or just a sensible conversation about your options.
Steven Mather is a solicitor who advises schools, charities, and parents on legal and commercial matters. Get in touch for expert, plain-English advice.