Labour’s VAT on non-public faculty charges quantities to ‘non secular discrimination’, Court of Appeal instructed

Christian private schools have accused Labour of ‘religious discrimination’ over VAT on fees in a new Court of Appeal bid. 

A group of Christian schools and families are continuing their legal fight against ministers over the tax, which came into force in January last year.

They say the policy interferes with their ‘right to education’ because equivalent religious provision is not available in the state sector.

In many cases, parents wanting a Christian education have no choice but to opt for a private school, they say.

In addition, the VAT is ‘discriminatory’ because it targets private Christian schools but exempts state-funded academies, they are arguing.

A group of Orthodox Jewish families who use private Charedi schools are also challenging the tax, on similar grounds.

It comes after the claimants, along with a number of other non-religious schools, lost a judicial review claim last year in the High Court.

In the new case, the claimants are seeking an exemption to the VAT for religious schools.

Caroline Santer, headteacher at The King’s School, a small Christian school in Fair Oak, Hampshire, said: ‘Christian schools like ours exist to serve families who want an education rooted in faith and values, often at great personal sacrifice.

‘The VAT policy is already forcing parents into heart-breaking decisions and putting schools on the brink of closure.

‘If this continues, it will dismantle decades of work in building Christian education that meets the needs of children academically and spiritually.

‘We are standing together because the right to choose an education aligned with your convictions must be protected.’

In court today, the claimants argued the VAT is in breach of the ‘right to education’ in the European Convention on Human Rights.

This says that parents should be able to ensure schooling does not interfere with their ‘religious convictions’.

However, in many cases, parents cannot have their needs met by their local state schools because they do not provide the same level of religious education that the families say they require. 

Forcing parents into the state sector, or causing religious schools to close, therefore would be interfering with those families’ rights under Convention, the claimants argued.

Other Christian schools involved in the appeal include Emmanuel School in Derby, The Branch Christian School in Yorkshire and Wyclif Independent Christian School in South Wales.

They said their schools are disproportionately affected by the policy because they tend to be smaller, catering for less wealthy people who cannot afford a price hike.

Andrea Williams of the Christian Legal Centre, which is supporting the claimants, said: ‘This is another example of ideological overreach by this Labour government.

‘[It] is deliberately narrowing parental choice and forcing families into decisions they would not otherwise make.

‘This case is about more than tax. It is about the fundamental freedom of parents to educate their children in accordance with their faith and deeply held beliefs.’

Acting for the Christian schools, barrister Bruno Quintavalle said: ‘The appellant-parents are evangelical Christians and they seek an education for their children which is not available and cannot be available in the state sector.

‘The educational choice which they seek for their children is required by them on account of their religious beliefs.’

He told the court that Labour was guilty of ‘political spin’ in characterising the VAT exemption for private schools as a ‘tax break’.

‘Prior to this measure, schools have never been subject to VAT,’ he said.

He said tax should be applied in a non-discriminatory manner and pointed out that it does not apply to state schools.

‘Private schools are victims of discrimination as a result of this VAT measure,’ he added.

‘It’s simply an education tax.’

Both the Christian and Jewish claimants highlighted how their schools often charge low fees to accommodate modest-income families. 

The High Court previously acknowledged that the VAT policy would disproportionately affect families in the lower half of the income distribution and could immediately displace around 3,000 pupils.

Permission for the appeal was granted in October last year. 

The two-day case is being heard by Sir Geoffrey Vos, Lord Justice Singh and Lady Justice Falk.

The VAT policy was in Labour’s manifesto and is expected to yield up to £1.7 billion a year.

In written submissions today, Sir James Eadie KC, representing the Government, said the policy ‘is explicitly and intentionally redistributive’ and involved ‘a decision about political and economic fairness’.

He added that Parliament ‘was entirely cognisant’ that ‘some children would have to move schools due to affordability concerns’.

And he added: ‘The particular position of families with educational preferences arising from their religious beliefs was specifically debated.

‘Parliament judged that the benefits of the measure, particularly in light of the suitability of non-denominational State schools for all children (irrespective of their religious beliefs), justified the enactment.’

In the previous ruling, Dame Victoria Sharp, Lord Justice Newey and Mr Justice Chamberlain said the exemption would mean the Government would lose out on ‘a very substantial slice of the revenue it hopes to raise’, which could be used for SEN provision in state schools.

Rejecting the claimants’ case, they added: ‘The aim was redistributive — and unapologetically so.’

First private school full closure announcement of 2026

Palmers Green High School in North London, an all-girls private school, has announced its closure due to falling numbers.

It is the first private school to announce a full closure in 2026, and it comes just over a year since Labour’s VAT on fees was first imposed.

It is not involved in the current legal case against the Government. 

The school said in a statement it will close at the end of this academic year, ‘with deep sadness’.

The decline in numbers had occurred ‘over many years’, and the school does ‘not have the financial capacity to continue’, it said.

The charitable 4 to 16 school, founded in 1905 by the quaker Alice Hum, has just 208 pupils, with capacity for 287 – according to official figures.

In December, it was named as Independent 11–16 School of the Year for Academic Excellence in the Sunday Times Parent Power Guide 2026.