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The British ministers were warned by officials that the imposition of VAT for private schools in January was the “most disturbing” option for students, as court documents show.
Treasury files show this chancellor Rachel Reeves dismissed the idea of introducing the 20 percent levy in April or August 2025 to “maximize income”.
The internal communications between finance officials and the Chancellor illuminates the government’s consultations last July, in the weeks between the profit of the general elections and the introduction of the directive.
The correspondence was preserved as part of A by the High Court legal challenge Against the government on its 20 percent tax in the area of private school.
Officials discussed a number of risks associated with VAT policy, including school closings, postponement of the state sector and the school payment programs.
According to court documents that were found by the Financial Times, Reeves was had different starting data with a table “professionals” and “disadvantages” and the effects on the sector.
In the briefing note sent on July 6, a start date from January 2025 is listed as the “most disturbing” scenario and “August/September 2025” as “least of all disturbing”.
Officials informed the Chancellor that the Department of Education itself “found that it could be less annoying for schools and parents if the changes came into force from August 2025.
However, an internal e -mail that was sent on July 15 between the state officials revealed that James Murray, the exchange secretary of the Ministry of Finance, “wanted to bring the two options of a January 2025 and a start date in April 2025” to make a final decision.
“The compromises between sales maximization (January) and the preparation of the schools (April)” added it.
The government would reserve the fees paid for July 29, 2024, since the VAT for parents was available to offer the tax to avoid the tax after being officially applied in January 2025.
The documents show that Reeves has been warned that it is a “retrospective” step that parents are prevented from avoiding private schools in advance, which could lead to legal disputes.
In the run -up to the elections in July, some private schools offered the parents the opportunity to pay fees for several years in advance to bypass the tax if the work has won the surveys.
A procedure against advance payments from the time when the announcement was made, “could be controversial, since the legislation has any subsequent effects,” wrote civil servants in the internal e -mail on July 15.
“But we believe that due to widespread reporting on attempts to avoid the changes and ensuring consistent treatment of parents, it is capable of defense,” they added.
Reeves was also expected that the recording of these advance payments to “some legal disputes between HMRC and affected schools” as well as “disputes between schools and parents, which ultimately bear potentially unexpectedly unexpected VAT liability” would lead to “disputes between schools and parents”.
Officials discussed whether the advance payment could be implemented earlier, but Reeves was pointed out that it would be “much more difficult to justify”.
The court documents show that civil servants are the costs of liberating independent students with special education needs that are not in education, health and care, from the VAT accusation of around 450 million GBP per year, which said that he had considered “unaffected”.
Her analysis also argued that around 100 additional independent schools could be closed over the next three years due to the VAT fee.
Officials found that between 60 and 80 independent schools could be closed for a year regardless of the levy, but would tighten the financial situation of schools, especially smaller schools.
They estimated that around 54,000 students “in most two years” were transferred to the state sector across Great Britain.
A spokesman for the Ministry of Finance said: “We do not comment on legal disputes.”
