For separating couples with children in private schools, one of the major issues is determining who will bear the responsibility for paying the school fees after the divorce.
What determines who pays the school fees?
Child maintenance payments do not typically cover private school fees so divorcing parents must apply to the court for a school fee order to cover the costs.
This is a specific provision that mandates one or both parents to contribute to the cost of their child’s private education.
It’s important to note that your existing agreements can be changed and amended in some circumstances.
For example, if a parent experiences a significant change in financial circumstances, such as a job loss or a substantial increase in expenses, they can apply to the court to have the original agreement reviewed which could lead to an adjustment in how school fees are divided.
It is important that you instruct a Family Law Solicitor to advise you upon your options and guide you through securing payment of school fees so there is as little impact to your child/children as possible.
The impact of VAT on private school fees
The newly elected Labour Government has repeatedly stated that they wish to remove VAT exemption for private schools which will undoubtedly increase the financial burden on parents.
This legislation hasn’t been passed yet and, currently, private schools in the UK are VAT exempt, but this change could mean an additional 20 per cent added to school fees.
For instance, if a private school charges £15,000 per year, the addition of VAT would increase the annual fee to £18,000.
Unfortunately, this significant rise could make private education unaffordable for many families who are already stretching their finances to cover these costs.
If you are a parent that’s currently divorcing (or has already divorced) you might need to consider this when negotiating financial settlements (or the need for a variation).
Your solicitor will help you work out whether the potential increase due to VAT will be a significant enough change to require altering or applying for school fees orders, based on your specific financial and personal circumstances.
Strategies for managing increased fees
Given the impending rise in private school fees due to VAT, as divorcing parents you need to explore various strategies to manage these increased costs effectively.
You might want to revisit your financial settlements with your solicitor to ensure that the agreements are sufficient enough to handle the additional financial pressure.
This might include negotiating higher spousal maintenance or lump-sum payments to cover the increased school fees.
Alternatively, many private schools offer bursaries and scholarships to assist with fees which could alleviate some of the financial burden.
Schools often have funds set aside to support families in need, particularly those experiencing significant life changes like divorce.
Despite the emotional strain of divorce, maintaining open communication regarding financial planning is crucial to ensure your child’s education is not disrupted.
Where possible, you need to work together, possibly with the help of financial advisors, to create a sustainable plan for managing school fees.
This might involve setting up a dedicated fund or investment to cover future costs.
Legal support and advice
Paying private school fees post-divorce, especially with the added complication of VAT, should prompt you to seek expert legal support.
We suggest both parents get independent legal advice to understand their rights and obligations fully.
As a family law solicitor, I can provide guidance on how to structure your financial settlements, apply for school fees orders, and manage any variations that might be necessary due to changes in financial circumstances.
In certain cases, we can also look at alternative dispute resolution methods to resolve disagreements regarding school fees amicably.
If you are unable to reach an agreement through negotiation or mediation, you may need to apply to the Court.
Again, we can assist in preparing the necessary documentation and representing you to achieve the best result.
For further information or guidance on this issue, please get in touch with our team.
Call now on 01926 356 053 to book an initial consultation for £300 plus VAT to speak to one of our Family Law specialists.