Now middle class faces soaring bills in rates raid
MIDDLE-CLASS families face the threat of soaring fees for private schools, gyms, golf clubs and student flats in a controversial shake-up of the business rates system.
Proposed reforms published yesterday include stripping independent schools of the right to use charitable status to claim relief on rates.
Gyms and other publicly owned sports facilities would also be forced to pay for the first time, while golf courses and universities also face having to stump up – raising fears that the extra costs will be passed on to families.
The proposals are contained in a Scottish Government-commissioned review led by former Royal Bank of Scotland chairman Ken Barclay. It rejected calls for a ‘significant overhaul’ of the entire system – meaning thousands of hotels, bars and restaurants face crippling increases in their bills from April.
Some businesses may be forced to shut down operations or axe jobs as a result.
The majority of private schools – as with other charities – are currently exempt but the proposals could add £5million a year to their costs.
‘Tinkering at the edges of a broken system’
In his review, Mr Barclay said it was ‘unfair’ that private schools receive reduced rates when state schools do not.
Among Scotland’s most prestigious private schools, George Heriot’s would have to pay £275,000 a year, while Fettes College would face a £310,000 bill.
John Edward, of the Scottish Council of Independent Schools, said the proposals would put the sector at ‘a competitive disadvantage in the UK and globally’, set schools ‘aside from other charities’ and have an impact on their ability to offer bursaries ‘for no sound legal, political, educational or economic reason’.
Mr Barclay’s report also recommended that facilities run by ‘arm’s-length’ companies set up by local councils – such as leisure facilities and swimming pools – should pay rates, which would add £45million to their costs. Some sports clubs would also have relief withdrawn, with the report noting that ‘two of the most prestigious golf clubs in the country’ benefited from £144,000 and £75,000 of relief.
Universities would have to pay rates on halls of residence accommodation if they rent out rooms during the holidays.
Some proposals were welcomed by business leaders, including a call to halve the ‘large busi- ness supplement’ to bring it into line with the rest of the UK. But the report was criticised for ‘failing’ to address increases facing some firms.
Earlier this year, Finance Secretary Derek Mackay announced a £45million rescue package after an outcry from some companies. Some 8,500 firms in the hospitality sector, 1,000 office premises in the North-East and 100 renewables firms had rates rises capped at 12.5 per cent because they had been facing increases of up to 600 per cent. However, the review does not contain any proposals to prevent firms facing eye-watering rises as early as next April.
Mr Barclay said there ‘was no strong appetite for a significant overhaul’ of the system.
Tory finance spokesman Murdo Fraser said: ‘There are many welcome proposals within this report but many firms will feel this is tinkering round the edges of a broken system.’
Mr Mackay said: ‘Having now received the Barclay Review, the Scottish Government will respond swiftly to its recommendations.’