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Private schools face £7m bill as they lose charity rate relief

This news post is over 3 years old

The cost to independent schools as a result of losing charitable tax rates is higher than first estimated

Private schools are facing higher costs than was originally estimated if they lose charitable rate relief.

It was announced at the end of 2017 that independent schools would lose out on the on the back of the Barclay Review into business rates.

It was thought that this would cost the schools a combined £5 million a year bill, but that is likely to be more than £7m, according to documents published alongside the non-domestic rates (Scotland) bill.

Smaller, rural private schools could be hit with bills equivalent to around £500 or £600 per pupil, according to John Edward, director of the Scottish Council of Independent Schools.

He said: “The idea that independent schools are full of the super-rich is simply not true. All of this money comes out of parents’ pockets. These schools are not-for-profit.”

Edward said the move could force institutions to hike fees, sell off assets such as playing fields, cut teachers or scale back means-tested assistance.

Private special schools and specialist independent music schools would continue to be eligible for charitable relief under the legislation.

In a financial memorandum accompanying the new bill, which was introduced to Holyrood yesterday and will now be scrutinised by MSPs, ministers said: "Mainstream independent schools will still retain their charitable status and other benefits will continue to flow to them from that status."

A year-long probe into Scottish business rates by former RBS chairman Ken Barclay made 30 recommendations and found no justification for private schools or so called arms-length external organisations (Aleos) of councils to continue receiving preferential business rates.



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