Divorcing couples are fighting over who will pay the VAT hike on private school fees, lawyers say

The VAT increase on private school fees from January has become a new battleground for divorcing couples, lawyers say.

The increase in school fees – which typically range from £6,000 to £13,000 per term – is impacting negotiations on ‘school fees orders’, while some existing orders are now potentially unaffordable, they explain.

“This issue has reached an urgent tipping point as parents must now decide whether to withdraw from school or enroll for next September,” said Vanessa Friend, a divorce lawyer at Hodge Jones & Allen.

‘It can be extremely difficult to reach an agreement in a divorce and this time-sensitive issue with a high price tag is creating an additional burden for many of our clients.’

Friend says taking a child out of school on top of a family separation is not something parents take lightly, and this financial and emotional dilemma often makes negotiations fraught.

Sarah Jane Boon, partner at Charles Russell Speechlys, says: ‘A court order for the payment of a child’s school fees will almost certainly not specify the amount of the school fees, or whether the payment is exclusive of VAT.

‘So the parent against whom the order has been made must pay the costs, including VAT, unless they can persuade the court to vary or revoke the order.’

Below, attorneys explain how school tuition orders work, what options are open to divorcing parents facing steep increases in the cost of private education, and what you can do about an order that is already in effect.

How do divorcing couples respond to the increase in school fees?

‘Over the past twelve months we have already seen more clients come to us to discuss private school fees due to the cost of living crisis. The upcoming VAT increase has only exacerbated this,” said Helen Marriott, partner at law. sturdy Brabners.

‘If payment of school fees has been agreed as part of a court order, the VAT increase is likely to fall on the parent who is already responsible for school costs.’

Although it’s a financial decision, it can have a big impact on children, especially older students preparing for exams, Marriott says.

She advises parents to communicate and make plans in advance, but notes, “Tuition can be a significant expense, so people often don’t know if they can afford it or not.”

Vanessa Friend says maintaining a private school education for children is often high on the list of non-negotiables when couples divorce.

But the substantial increase in tuition has resulted in an increase in the number of people fighting over whether they can afford private school and who should cover the costs, she says.

Tuition fee orders, which require one or both parties to pay, are not uncommon, but the additional VAT burden makes it more complex and time-consuming to agree on the obligation, Friend explains.

“The substantial change in costs means some couples are unable to provide their child with the education of their choice,” she added.

What options are open to divorcing couples with children in private schools?

Parents need to be realistic and take into account inflation, VAT and extras on the school bill, says Vanessa Friend.

‘Some people are willing to prioritize school fees, others are not. The problem arises when the parties cannot agree on where to meet in the middle.

‘We strongly advise all couples not to enter into a legally binding agreement unless they are confident they can meet these obligations for the full term.’

She runs through the possible options couples face.

– Determine what needs they are willing to compromise on, such as the quality of their accommodation.

– Sell the family home, including further downsizing than previously planned to free up capital.

– Dive into savings, or set savings and investments aside.

– Discuss the issue during mediation and take a holistic approach to child rearing and other childcare matters.

– Set aside an amount of money that is already available to cover all future school costs, rather than relying on future income – through a tuition fund given to the financially dependent party, or through a joint account that provides control and oversight for both.

– Move to the catchment area of ​​a good state or secondary school, although housing costs tend to offset some of the savings.

– Consider whether income protection is available that could cover the cost of school fees in the event of disability.

What if you have an order and cannot afford the costs?

If a parent is struggling to pay school fees, it can be tempting to just give up, says Helen Marriott of Brabners.

But she warns: ‘If a court order is breached it could lead to payment arrears arising and coercive measures being taken.

‘At worst it could be considered contempt of court, which is a criminal offence. The school may also be able to file a civil claim against the beneficiary for breach of contract.”

Marriott says that if parents now know that they will no longer be able to pay the costs after the VAT increase from January, they should let the school know as soon as possible.

They must look for available places from the new year onwards, so that children do not have to go to a new school halfway through the school year.

‘If parents cannot agree on a new school, a petition to the judge may be necessary. If parents can jointly cover the costs, a new payment structure can be agreed out of court to ensure their children’s education remains consistent.”

She continues: ‘If parents cannot agree on fees, they can submit a request to the judge. However, given the significant delays in current legal proceedings, this issue could take up to 12 months to resolve, so this should be a last resort.”

Sarah Jane Boon, partner at Charles Russell Speechlys, said: ‘An application to vary or revoke the order will only succeed if the applicant can demonstrate that the fees are no longer affordable, through up-to-date disclosure of their income and expenses.

‘Even if the other parent has not paid the school fees, he/she will also have to be open about his/her financial position, so that the judge can decide whether he/she must now contribute to the increased school fees.

‘Possible savings that both parents can spend on school fees can also be considered.’

Vanessa Friend of Hodge Jones & Allen says an application to the court to reduce an award of unaffordable costs should not be relied upon.

“The court will not grant the request lightly. We encourage couples to discuss issues at an early stage and consider alternative forms of dispute resolution, such as mediation. This is probably cheaper than going to court.’