Private schools to save £522m in tax thanks to charitable status

Educational reporter(wp):

Private schools are set to get tax rebates totalling £522m over the next five years as a result of their controversial status as charities, according to a study of local council records.

Charitable organisations in England and Wales are entitled to relief of 80% on the business rates payable on the buildings they use, and some of the country’s best-known private schools qualify under the rules.

Business rates firm CVS sent freedom of information requests to councils, and responses from 132 showed that 586 out 1,038 private schools held charitable status and were granted the mandatory relief.

Its analysis of government data suggested that on 2,707 properties classified as private schools there would be a business rates bill of around £1.16bn over the next five years. Extrapolating from the data received from councils, it forecast that £634m would be paid, with £522m saved through the schools’ charitable status.

CVS said Eton College, whose former pupils include David Cameron and Boris Johnson, would have faced a bill of £4.1m for business rates over the next five years without its charitable status, but instead it would pay just £821,040.

Dulwich College in south London, which educated former Ukip Leader Nigel Farage, will only pay £786,752 out of its £3,933,760 five-year bill under the tax regime.

Leeds grammar school, which offers extensive sports facilities on a campus of nearly 60 hectares (140 acres), will only pay £826,016 out of its £4,130,080 five-year bill.

Business rates have come under fire since an overhaul resulted in huge rises for schools and hospitals along with businesses in London and the south-east. The government promised £300m to ease through the reforms, but refused to alter the status of public sector organisations or review the charitable status of private schools.

The Department for Communities and Local Government said private schools seeking charitable status “must meet a robust public benefit test”. It also said academies, foundation schools and voluntary-aided schools automatically qualified for charitable status, while insisting that state-school funding accounted for the cost of business rates.

In the run-up to the election, Labour leader Jeremy Corbyn announced plans to charge VAT on private school fees to fund free school meals for primary school children.