VAT on Private School Fees

The UK government has confirmed that VAT will be payable on private school fees starting from January 2025, which will have significant financial implications for separating and divorced parents.

Parents no longer able to afford private school fees may in some cases result in sending their children to state schools which are already mainly oversubscribed. The reforms may also have a disproportionate impact on many parents who have children with special educational needs, as many specialist schools are private. 

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

Key Points:

Timing and Rate: The standard 20% VAT rate will be added to private school fees from 1 January 2025.

Financial Pressure: This change will place considerable pressure on parents mid-way through the school year, particularly challenging for divorcing couples who are already stretched financially.

Impact on Divorce Settlements: The VAT addition may affect not only families with children currently in private schools but also those who had planned to send their children to private schools in the future.

Existing Court Orders For separated couples with court orders detailing school fee responsibilities, the increased costs may lead to difficulties meeting payments and potential breaches of orders.

Considerations for Separating Parents:

Affordability: The sudden hike in school fees adds another layer of complexity to divorce negotiations, potentially impacting asset division and maintenance arrangements

Renegotiation: Existing agreements may need to be revisited, and parents might need to consider varying court orders if the fees become unaffordable.

Alternative Dispute Resolution: Exploring non-court dispute resolution methods like mediation or arbitration can help parents navigate these changes.

Legal Advice: It's advisable to seek legal advice if there are concerns about meeting school fee obligations or if changes to existing arrangements are necessary.

Child's Best Interests: Any decisions regarding schooling should prioritize the child's best interests, but courts are unlikely to order private schooling if there's inadequate funding.

This change in VAT policy presents a significant challenge for separating parents, potentially complicating financial arrangements and requiring careful consideration of children's educational needs within the context of changed financial circumstances.

Get in touch with Safeena Tufail at Hewetts Solicitors at S.Tufail@hewetts.co.uk if you are concerned the school fee VAT imposition is going to affect your separation, divorce or current arrangements for your children.

Published on 23/10/2024