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