Private schools to lose charity rate relief next year

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The Scottish Government has confirmed independent schools will lose charitable rate reliefs of up to 80% from next year

5th December 2019 by Gareth Jones 0 Comments

The Scottish Government has confirmed that rate relief for private schools will be scrapped from next year.

The announcement means the schools will no longer get charitable relief of up to 80% on their bills for non-domestic rates.

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.

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.

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 in the spring.

Public finance minister Kate Forbes made the latest announcement while giving evidence to Holyrood’s Local Government and Communities Committee.

She said: “The Barclay Review implementation plan was published in December 2017, which is two years ago, and it was clear that we would deliver the change by 2020 to allow time for those schools affected to plan ahead.

“The independent schools provisions are not currently identified for early commencement, but I can confirm that it would be the Government’s intention to commence these provisions from September 1, 2020, subject of course to the committee’s decisions and votes.

“A September 2020 commencement date would be almost three years after the change was first recommended by the Barclay Review, and it would tie introduction to the academic year rather than the start of the financial year which should hopefully help schools with their planning for academic year 2021.

“We’ve always been clear that we will deliver this change as recommended by the Barclay Review, and I hope that confirmation of the Government’s commencement intentions will assist the sector in its ongoing planning.”

Anna Fowlie, chief executive of the Scottish Council for Voluntary Organisations (SCVO), called for a wider review of which types of organisations should have charitable status.

She said: “Stopping tax relief for one group of charities misses what we believe to be the bigger question, about which types of organisations should be eligible for charitable status.  We would like to see a broader discussion on whether the current charity test meets public expectations about what it means to be a charity in the 21st century. The ongoing review of charity law presented the ideal opportunity to address this fundamental issue, and it’s disappointing this question has been omitted.”