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Class war: calls made for private schools to lose charity status

This news post is about 1 year old
 

SNP could discuss ending tax breaks and placing a levy on pupils

Renewed calls are being made for Scotland’s private schools to be stripped of their charity status.

The institutions – attended by just four per cent of the country’s pupils - gain from substantial tax breaks and benefit from Gift Aid on donations.

There have long been calls for reform – and the issue could raise its head again at the Scottish National Party’s forthcoming annual conference.

The Herald reports that two SNP branches – Glasgow Provan and Peterhead – have submitted a resolution demanding an end to “their entitlement to charitable status”.

It also calls for a new levy to be placed on every pupil. Cash raised through this would be used to help close Scotland’s attainment gap.

The resolution reads: "Conference recognises that the educational attainment gap remains stubbornly high between those from the least advantaged backgrounds and those from the most advantaged backgrounds.

"Conference also recognises that private schools benefit from charity status and many leavers from these establishments achieve greater positions in the field of employment."

It adds: "This conference agrees that in order to close the educational attainment gap and give our least advantaged children a better start in life that the SNP Scottish Government should use the taxation powers at its disposal and create a tax equivalent to Value Added Tax for each place at these private schools, and that we should end their entitlement to charitable status.

"Conference also agrees that the revenue raised from this should be directly deployed to fully close this educational attainment gap."

As charities, independent schools do not pay tax on annual profits, and the institutions have already lost their eligibility for charitable relief on their business rates.

The motion has been listed on the SNP's draft agenda for its annual conference and if selected will be debated at the Aberdeen event in October.

The independent schools sector has hit back, saying the move would amount to a tax on “aspirational” families.

A spokeswoman for the Scottish Council of Independent Schools, itself a charity, said: “The independent school sector in Scotland is diverse, progressive and committed to making a strong contribution to society.

"It is significantly different from the sector in England, as a result of the charity test introduced by the Scottish Government and the removal of business rates relief, both of which are unique to Scotland and which have already increased the taxation burden on independent schools substantially.

"Almost 3,000 children are in receipt of bursaries at Scotland’s independent schools and these are rigorously means tested. Scotland’s independent schools already work in partnership with the state sector – such as offering teaching for state pupils – and we would welcome discussions about how to build on the work we are already doing, so that we can support even more children in Scotland.

"We will achieve much more by working together than by imposing a tax which would hit aspirational families hardest, would lead to the disruption of education for the children whose parents would be pushed out the sector, as well as increasing the burden on state schools."

 

Comments

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Lok Yue
about 1 year ago

I take it that by 'regressive selfish people control the puppet strings.' you mean the SNP /Green government?

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Gareth Morgan
about 1 year ago

As the article makes clear, independent schools in Scotland have already lost their charitable relief from business rates, so it is a bit unclear what further charitable benefits this motion hopes to exclude.

The article mentions gift aid, but parents cannot gift aid school fees for their children. Schools can only seek gift aid donations for appeals that do not relate to specific pupils such as for new buildings or equipment. But many state schools have linked charities (e.g. "Friends of" or PTAs) that allow gift aid donations which fund facilities that go beyond the statutory provision. So this is hardly an advantage linked to the charitable status of independent schools.

It is also worth noting that fee-charging educational charities are VAT exempt (NOT zero rated). Any many charities know, providing VAT exempt services is pretty costly, because whilst you don't charge VAT on your fees, you cannot reclaim any VAT on your purchases (unlike state schools run by local authorities where VAT can be recovered). Moreover, most charity tax reliefs other than business rates are determined by Finance Acts at UK level, so they cannot be changed by the Scottish Parliament whilst Scotland remains part of the UK.

The motion recognises these limitations by calling for a "tax equivalent to VAT" to be added to school fees, but it is hard to see how this could be achieved within devolved powers.

Of course, in an independent Scotland things could be different - but assuming Scotland then rejoins the EU, the Scottish VAT regime will need to comply with EU law.

but the motion

So, in terms of the motion's call for action by the S

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John Brown
about 1 year ago

While we do this, we can remove uni fees from wealthy families and push that downstream to those in need. So we create more educated Scots to bust apart the class system and create a dynamic nation of opportunity again. But Turkeys don't vote for Christmas, they love old-fashioned stagnation. So none of this will happen while regressive selfish people control the puppet strings.

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