The Government's VAT on Independent School Fees: Unfairness Exposed by Exemption for US Military Families

By Andrew McGarva, Rector of Morrison’s Academy in Crieff

In recent weeks, the UK government’s decision to impose VAT on independent school fees has sparked considerable debate, with many questioning the fairness and rationale behind the policy. The latest development in this saga—the VAT exemption for children of US military personnel, due to the 1951 NATO Status of Forces Agreement—has further compounded concerns. Not only about the government’s priorities but also the consistency and fairness of the policies affecting children, families, and educational institutions across the UK.

The VAT imposition on independent school fees is a stark shift in policy that has already caused significant disruption. Many families with children in independent schools are struggling with the financial implications, especially in uncertain economic times. A national consultation conducted before the tax’s introduction revealed significant concerns from various groups, including families of children with special educational needs, faith-based schools, and those running niche and specialist schools that nurture exceptional talent in the arts or sports. Additionally, schools serving the children of military personnel, who often face the challenge of frequent relocation, have found themselves facing heightened uncertainty.

Despite numerous warnings and concerns from a wide array of stakeholders, including from the Scottish Government, the UK government has pushed ahead with this policy without any apparent attempt to mitigate the harm. The initial hope, before the election, was that there would be time for schools to adjust to the new tax, with September 2025 suggested as a reasonable start date. This would have given schools time to plan, families time to adjust, and perhaps even allowed for a more considered approach. However, the swift introduction of the VAT this month has added unnecessary pressure on already-stretched families, leaving many feeling as though their concerns have been ignored.

Even more frustrating is the government’s refusal to consider exemptions for vulnerable groups. Families with children who have additional needs, those attending specialist schools, and military families - groups that stand to be disproportionately affected by this tax - have been denied any special dispensation. Yet, at the same time, the government has introduced a specific exemption for the children of US service personnel. This exemption is claimed to be in adherence to a 1951 NATO agreement, an arrangement established more than seven decades ago.

It is difficult to avoid the sense that the priorities at play here are not about fairness, but rather about maintaining alignment with international agreements. While global cooperation, especially with allies like the US, is undoubtedly important, one must ask why an outdated agreement is being prioritised over the needs of UK families?

The government’s stance on this issue seems inconsistent when compared to its scepticism towards other international agreements. They are currently in breach of the European Convention on Human Rights, a position that is being challenged in the High Court between 1 and 3 April. This suggests that political convenience, rather than a true commitment to fairness may be driving the decision.
At its core, this latest decision undermines the notion of fairness and equity that should underpin our education system. We should be striving for policies that support all children, regardless of their background or where they come from. We should be encouraging diversity, inclusivity, and opportunity for every child, not enacting policies that leave vulnerable groups even further behind and becoming the only country in the world to tax education.

In the face of this Education tax, we risk losing sight of the values and educational excellence and fairness that the UK has long prided itself on. The government must reconsider its approach, taking into account the very real impact this policy is having on thousands of families and children across the UK. It is not too late to course-correct and build a system that truly reflects the best of British education - one that serves the needs of all its citizens, regardless of their background or circumstances.