VAT on private school fees could be a new pressure point for divorcing couples

Deciding where your child goes to school is one of the most important – and stressful – decisions in any parent’s life.

It’s made more complicated if your school of choice cannot be agreed with the other parent, and trickier still if you’re in the midst of a separation or have gone through a divorce.

The new Labour government’s proposal to end private schools’ VAT exemption in 2025 will mean one more potential sticking point for those parents who are currently able to afford private education for their children.

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Uncertainty around exact details of the proposals, such as whether parents will be able to pre-pay fees (at a discounted rate) in order to mitigate the increase, adds another layer of complexity.

Felicia Munde shares her expert insightFelicia Munde shares her expert insight
Felicia Munde shares her expert insight

When parents separate, arrangements for the children can be one of the most complicated and emotive parts of the process.

Separated parents have to grapple with co-parenting and maintaining stability for the children whilst often undergoing substantial financial adjustments as they transition from a single household to two.

Along with the children’s living arrangements, the choice of school is among the most hotly contested issues that we see, both at primary and secondary level.

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Parents will sometimes clash over the choice between state and private education. One parent may wish to invest in private education, whilst the other may not.

Both parents may want their children to ‘follow in their footsteps’ and attend the same school as they did; or they may agree on favouring either the private or state route, but disagree on which particular school would be best.

Affordability is of course only one consideration. Some parents will place more emphasis in Ofsted ratings; some will seek to nourish their child’s budding mathematical or musical talents and pick a specialist school; and for some it’s all about location, location, location.

Parents who are separating are especially likely to quarrel over the latter, each unsurprisingly pushing for their children to be educated as close to their respective home as possible.

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With the costs of private education on the rise, payment of those fees – including who does it, and whether it’s worth it – might become a can of worms for separated parents.

One parent may argue that it’s no longer affordable for them, or that either a particular school or private education altogether is no longer worth the expense. Things could get even more complicated if overseas education suddenly looks like it could provide better value.

If imposition of VAT covers current pupils it could even reignite previously settled disputes between parents if whomever is paying the lion’s share of the fees is no longer able to afford to do so.

Separated parents should ensure that they consult the other parent before taking any steps and consider their children’s best interests when making a decision about their education. That is ultimately the position a court will adopt. If they cannot agree on those best interests, the parents should consider obtaining legal advice to see what options are available to them.

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This could include approaching a third party, such as a trained family mediator or an arbitrator.

As a last resort, either parent could of course bring court proceedings by applying for a Specific Issue Order, however this does not provide a quick resolution and may result in prolonged uncertainty for the children.

Time will only tell if more disputes over private schooling are brought to the already very stretched and under resourced family court system.

Felicia Munde is a senior associate in Stewarts Law divorce and family team

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