If your financial order mentions school fees but was written before January 2025, it almost certainly says nothing about VAT, and that gap is now landing on someone’s bank statement.
Last week a barrister who acted in the Court of Appeal case on school fees orders gave separated parents a warning worth taking seriously. Suzanne Syme of Harcourt Chambers pointed out something we have started to see in the mediation room ourselves: VAT on school fees has applied at twenty per cent since January 2025, but the great majority of financial orders that deal with those fees were drafted before the tax existed. Those orders were written carefully, agreed in good faith, and are now quietly out of date.
The autumn term invoice is often the moment it becomes real. One parent opens an account statement, sees a figure that is noticeably higher than the one they budgeted for, and assumes the other parent has changed the arrangement or is not paying their share. Nobody has done anything wrong. The order simply did not anticipate a tax that nobody knew was coming.
If that sounds familiar, it is worth understanding what has actually happened before anyone reaches for a solicitor’s letter.
How a generous cap became a shortfall
Many orders express the school fees commitment as a cap: one parent will pay the fees up to a fixed ceiling. When that ceiling was set it usually had a little headroom in it, which felt like sensible planning at the time.
Ms Syme gave a clear illustration. A cap of eighteen thousand pounds against net fees of sixteen thousand five hundred looked generous in 2022. Add VAT and the invoice becomes nineteen thousand eight hundred, which means the other parent absorbs one thousand eight hundred pounds that nobody ever agreed they would pay. Multiply that across two children and several years and you have a real change in one household’s finances, arriving without any discussion at all.
Whether an existing order already covers the VAT depends entirely on how it was drafted, and no family court has yet ruled on the point. Some orders refer to fees “as invoiced”, which may well carry the tax. Others fix a figure and stop there. Two families with almost identical circumstances can therefore be in quite different positions, purely because of wording chosen years ago.
Your order binds you, not the school
This is the part parents are most often surprised by. A financial order made between two people is an agreement between those two people. The school is not a party to it and is not bound by it.
If both parents signed the enrolment contract, and most did, the school is entitled to pursue either of them for the whole of the bill. It does not have to work out which parent the order says should pay, and it will not divide the invoice for you. So a parent who believes the order protects them from a shortfall can still receive a demand for the full amount, and an unpaid balance can escalate into a threat to the child’s place.
That is the risk that turns a spreadsheet problem into a family one, and it is the reason this is worth addressing now rather than at the end of the school year.
Waiting for December will not remove the tax
There is a legal challenge to the VAT on school fees policy heading to the Supreme Court, with a hearing listed for 1 and 2 December this year. Understandably, some parents have decided to sit tight until then.
We would gently suggest that is not a plan. The hearing concerns whether the tax was lawfully introduced, not whether your particular order was well drafted, and a decision in December would not retrospectively rewrite the arrangement you agreed in 2022. Meanwhile the invoices keep arriving, one parent keeps absorbing the difference, and resentment has several more months to settle in. As Ms Syme put it, waiting for December will not remove the tax.
Where mediation is genuinely useful
An issue like this is close to ideal for family mediation. It is a defined, arithmetical question sitting inside an emotional relationship. There is no villain in it. Both parents want the same outcome, which is for their child to stay where they are, settled and unaware that any of this is happening.
In practice, a session or two on this usually covers:
- What the order actually says, read slowly and together, rather than from memory or from a single remembered sentence.
- What the fees now cost with VAT included, taken from the school’s current invoices rather than from either parent’s estimate.
- Who has been carrying the shortfall since January 2025, and whether anything needs to be settled for the period already gone.
- What each household can realistically afford now, honestly and with figures on the table.
- Whether the answer is to share the VAT, adjust the cap, revisit another part of the settlement to balance it, or, for some families, plan a move to a different school with proper notice and a united message to the child.
Where parents reach an agreement, a solicitor can convert it into a revised consent order so the new figures are properly recorded. That route is considerably quicker and less expensive than a contested application, and you can see what it involves on our prices page. Crucially, it is the two of you deciding, rather than a judge who has never met your children choosing between two positions.
Speak to the school as two parents
Schools have spent the past eighteen months having this conversation and many are more flexible than parents expect, particularly about payment timing and instalments. What they respond poorly to is two separated parents contacting the bursar separately with different accounts of who owes what.
Agreeing a single approach first, then making one joint enquiry, protects your credibility and often produces a better answer. It also spares your child the experience of being the subject of a dispute the school can see.
A practical first step
If you have an order dealing with school fees, take ten minutes this week to find it and read the relevant clause properly. Look for whether it names a fixed sum, a cap, or the fees “as invoiced”, and whether extras such as trips and music lessons are mentioned. Then compare it with the last invoice you received. If the two do not match, you have something to sort out, and it is far better sorted out by agreement than by correspondence.
This is a tax change nobody in your family chose and neither of you can undo. What you can still choose is how you handle it. If you would like to talk it through, our frequently asked questions explain how mediation works and what a first meeting involves, and we are always happy to answer a question before you commit to anything.
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