Government confirms VAT will be applied to private faith schools

The UK Government has confirmed that VAT will be applied to private faith schools across the UK as part of its plans to remove VAT exemption for private schools. Humanists UK, who wrote to the Chancellor of Exchequer urging her not to apply any faith-based carve-outs to the VAT policy, has welcomed this announcement. However, it is concerned about private faith schools seeking to get around the policy by ostensibly – but not really – making their fees voluntary.

Some private faith schools, including three private Christian schools, have said they will take legal action against the UK Government. These schools claim the policy would unlawfully discriminate against parents because it would force these schools to close and deprive them of providing a faith-based education for their children. At the time Humanists UK disputed this claim, arguing that even if private faith schools did close, state-funded faith schools would continue to exist. This view has been supported by the UK Government in its response to its technical consultation with parents and private school providers: 

‘[I]t is the government’s position that state education is suitable for children of all faiths. All children of compulsory school age are entitled to a state-funded school place if they need one, and all schools are required to follow the Equality Act. These include fostering and promoting an environment that encourages respect and tolerance of children and families of all faiths and none. As a result of these considerations, faith schools will remain in scope of this policy (2.23).’

Humanists UK campaigns for an inclusive education and schools system that allows no privilege or discrimination on grounds of religion or belief, and gives children and young people of all different backgrounds and beliefs an environment that lets them learn with and from each other. This includes campaigning for an end to religious discrimination in school admissions and employment, and for a progressive reform of the curriculum including religious education.

Humanists UK’s Education Campaigns Manager Lewis Young said:

‘We welcome the UK Government’s announcement that there will be no faith-based carve-outs to its private school VAT policy and that private faith schools will be included. 

‘We also welcome its statement that no child is being deprived of state-funded education as a result of this policy, and that children have the same fundamental rights concerning education regardless of the type of school they attend.’

A problem ahead: private faith schools pretending they charge no fees but instead have ‘voluntary’ donations

The UK Government’s response also states that rather than being disproportionately impacted by the VAT plans as some private faith school providers have argued, some small private faith schools are ‘likely to be less than proportionately impacted’ by the plans as they receive donations from the community and religious organisations (2.19). 

Humanists UK is aware that some private faith school providers including Chinuch UK, the body representing Charedi schools, are reviewing whether schools which operate on a voluntary donations basis rather than fees will fall outside of the new VAT rules. But there is concern that in fact parents at such schools are coerced into making such ‘donations’, and so they are in fact mandatory. If this is the case, private faith schools could follow this model. Humanists UK will be writing again to the UK Government to urge HMRC to implement the strongest possible regulations to make sure all donations are made on a voluntary basis and that no family is coerced into making them.