Chancellor Battles VAT Raid with Thousands Spent on Legal Fees
Rachel Reeves is expending substantial sums of money on legal costs to defend her contentious case VAT Regarding the school fees policy, an 'unprecedented legal challenge' is approaching.
Parents against the 20 percent education tax are raising funds through crowdsourcing to support an upcoming significant legal challenge at the High Court next month. This action aims to advocate for their children with Special Educational Needs (SEN).
A legal representative characterized their efforts as "working hard to prevent extremely serious situations for numerous claimants who are incredibly vulnerable."
In the meantime, the Chancellor, who is serving as the defendant, has enlisted the services of four King’s Counsel members—the most seasoned and costly barristers in the country—to represent the government's position.
If they lose in court, the government might have to drop the tax that impacts all 550,000 students in the private school system. Among those affected are approximately 100,000 who have special educational requirements.
Legal experts said 'the serried rank of barristers' was a clear sign the Government saw the case as a direct threat to 'a manifesto promise' and an 'unprecedented challenge'. One said: 'It is very, very rare that a flagship piece of legislation like this is challenged in the courts.
The practical consequences are incredibly significant since numerous educational institutions across the nation are presently enrolled in VAT or are in the midst of registration, with hundreds of thousands of guardians figuring out ways to cover these costs. If this law were repealed, reversing such an extensive and intricate system would entail monumental efforts.
The parents involved in the judicial review filed for April 1 argue that this tax infringes upon their children's right to obtain necessary education as it renders it financially out of reach.
In documents submitted before the trial, the government refutes this claim, stating that the children would get the necessary education through the public school system.
A source stated: "The government may end up spending tens of thousands of pounds daily per KC working on this case. The overall cost could accumulate to several hundred thousand pounds."
The Mail on Sunday was informed that this case would be "one of the most prominent cases ever to be heard in the administrative division of the High Court."
James Gardner from SinclairsLaw, who represents the claimants, stated: "This unprecedented challenge against an iconic yet stringent governmental policy has garnered support from tens of thousands of parents. The implications for students with significant special educational needs are incredibly profound."
'The government itself acknowledges that the state SEN system is entirely dysfunctional, and it continues to deteriorate annually. However, the government remains resolute—it has allocated substantial resources to this struggle and is putting up a fierce fight.'
A spokesperson for the government stated, "We refrain from commenting on matters currently before the courts."
Eliminating tax exemptions for private institutions could generate an additional £1.8 billion annually by the fiscal year 2029-30. This funding would be used to create approximately 6,500 teaching positions and enhance educational quality, thereby aiding the 94 percent of pupils enrolled in public schools to excel and succeed.
The news about this case arrives as two additional independent schools—the Falcons School located in Putney and Ursuline Prep situated in Ilford—have informed their parents that they are probably going to shut down because of financial difficulties.
Twelve schools have announced closings since value-added tax was introduced on fees back in January.
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