Private school fees set to rocket as £37m tax break faces axe

Scotland’s private schools are facing substantially higher costs than initially feared under plans to scrap tax breaks for the sector.

It is likely to mean a bill of almost £37 million over the next five years as ministers move to end charitable relief for the institutions.

It had initially been estimated that the independent sector would be hit with a £5m a year bill, but that is likely to be more than £7m a year, according to documents published with the Non-domestic Rates (Scotland) Bill.

Smaller, rural private schools could be hit with bills equivalent to around £500 or £600 per pupil, according to John Edward, director of the Scottish Council of Independent Schools.

“The idea that independent schools are full of the superrich is simply not true. All of this money comes out of parents’ pockets,” he said. “These schools are not-for-profit.”

It could now result in fees going up, playing fields and other assets being sold off, as well as cuts to teacher numbers and grant funded assistance for poorer youngsters.

Private schools are currently eligible for 80 per cent mandatory rates relief if they are registered as a charity, but this will end under the shake-up of business rates.

State schools do not qualify for charitable relief.

Based on a commencement date of 2020-21, ministers said the new rules would see private schools forced to pay £7m extra in the first financial year.

This would rise to £7.2m the following year, £7.4m the year after, £7.5m in 2023-24 and £7.7m the next year, taking account of inflation.

In total, schools would pay £36.9m more in the first five years.

Mr Edward said boarding schools with a lot of grounds will have a higher rateable value which could see £500600 extra charges per pupil.

“That will push a substantial number of parents out of affordability. Every pupil that leaves independent schools because fees go up is a greater cost to the taxpayer.”

Tory education spokeswoman Liz Smith said: “This bill makes no sense. The SNP has, rightly, been a great pains to say all schools should be much more inclusive and accessible to those from underprivileged backgrounds, yet this proposed legislation would do exactly the opposite.”

A Scottish Government spokesman added that despite losing the tax breaks, independent schools will still retain charitable status and “other benefits” will continue to flow from that.