Pri­vate school lob­bies MSPs to stop ax­ing of ‘char­ity’ tax re­lief

Sunday Herald - - NEWS - BY PAUL HUTCHEON

ATOP pri­vate school in Glas­gow has lob­bied MSPs in a bid to halt pro­pos­als to end a lu­cra­tive sys­tem of ‘char­ity’ tax breaks for the fee-pay­ing sec­tor.

Hutch­esons’ Gram­mar, which charges £11,728 a year for its ser­vices, has asked for a state­ment of sup­port from them while the Gov­ern­ment con­sid­ers scrap­ping tax re­lief on its prop­er­ties.

The school’s rec­tor and chair of gover­nors also claimed that the in­de­pen­dent sec­tor saves the tax­payer money on ac­count of par­ents not us­ing their state school places.

How­ever, Green MSP Pa­trick Harvie said: “Pri­vate schools are al­ways keen to ar­gue that they ben­e­fit the whole of so­ci­ety, but the ben­e­fit they cre­ate goes over­whelm­ingly to the wealth­i­est, in­creas­ing in­equal­ity in our so­ci­ety and di­min­ish­ing the di­ver­sity of tax­payer-funded schools which are run as a gen­uine pub­lic ser­vice.”

He added: “I don’t think there’s any rea­son­able ba­sis for such in­sti­tu­tions of priv­i­lege to en­joy char­i­ta­ble sta­tus or the tax ad­van­tages that come with it.”

Pri­vate schools en­joy a suite of tax breaks worth mil­lions of pounds ev­ery year on ac­count of be­ing clas­si­fied as char­i­ties.

The schools get a mandatory 80 per cent dis­count off their non-do­mes­tic rates (NDR) bill – levied on prop­er­ties – but the tax re­duc­tion has been called into ques­tion by a Gov­ern­ment-com­mis­sioned re­view into the en­tire rates sys­tem.

The Bar­clay Re­view stated: “In­de­pen­dent (pri­vate) schools that are char­i­ties also ben­e­fit from re­duced or zero rates bills, whereas coun­cil (state) schools do not qual­ify and gen­er­ally will pay rates.

“This is un­fair and that in­equal­ity should end by re­mov­ing eli­gi­bil­ity for char­ity re­lief from all in­de­pen­dent schools.”

Min­is­ters are mulling over the pro­posal, but many pri­vate schools are alarmed at what they be­lieve is a threat to their fi­nances.

In a let­ter to MSPs, Colin Gam­bles and Ruth Walker – two of the most se­nior fig­ures at Hutch­esons’ Gram­mar – claim that the re­view “threat­ened” the sec­tor with “con­sid­er­able eco­nomic reper­cus­sions” and asked for the sup­port of MSPs.

They ar­gued that the ra­tio­nale be­hind the re­view is “flawed” as pri­vate schools have al­ready passed the “char­ity test” over­seen by a watch­dog.

Gam­bles and Walker also claimed: “The ed­u­ca­tion of each child in the in- de­pen­dent sec­tor saves the Scot­tish tax­payer £6,525 per se­nior pupil per year and £4,667 per pri­mary pupil per year.

“The Bar­clay Re­view threat­ens this sav­ing to the pub­lic purse as more chil­dren would have to re­turn to state-pro­vided ed­u­ca­tion.”

The pair also claimed that the “un­in­tended con­se­quences” of the plan would be “deeply dam­ag­ing” to the ed­u­ca­tion of young peo­ple and asked for a “state­ment of sup­port in your con­sid­ered re­sponse to this let­ter”.

A spokesper­son for the Ed­u­ca­tional In­sti­tute of Scot­land, the trade union that rep­re­sents teach­ers, said: “The EIS has long be­lieved that in­de­pen­dent schools ben­e­fit­ting from char­i­ta­ble sta­tus while state schools do not is in­equitable and in need of re­view.

“The fact that state schools, which pro­vide ed­u­ca­tional op­por­tu­ni­ties to young peo­ple of all back­grounds, pay higher rates than fee-pay­ing schools is some­thing that is dif­fi­cult to jus­tify.

“This does not au­to­mat­i­cally mean that the re­moval of the rate sub­sidy is re­quired but a de­gree of equity be­tween the sec­tors would be wel­come.”

End­ing the tax break is likely to de­pend on the SNP Gov­ern­ment sup­port­ing the re­view pro­posal.

The Greens are against pri­vate schools’ tax ad­van­tages, while Labour has said that it “can­not be right” the schools re­ceive char­i­ta­ble re­lief. How­ever, the par­ties do not com­mand a ma­jor­ity at Holy­rood.

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