Charity status of private schools under threat

Business rates will be reviewed by the Scottish Parliament, with proposals to remove the charitable status of independent schools.

The Scottish Parliament is considering reforming the system and is now calling for feedback from the public on the plans.

Non-domestic rates are levied on business properties, determined by the assessed value of the building, and are the second-highest source of tax income for the Scottish Government.

After a review into the system by former RBS chief Ken Barclay, which made recommendations to reform non-domestic rates, a Bill has been introduced in the Scottish Parliament. It proposes carrying out valuations every three years, rather than the current five years, and tackling known tax avoidance, including tactics involving unoccupied or under-used properties.

The Bill, put forward by Economy Secretary Derek Mackay, also recommends independent schools should no longer be able to claim charitable relief, which would amount to £37 million between 2020 and 2025, it suggests.

Under the current system, independent schools with charitable status pay 20 per cent of their rates bill, while local authorities have the discretion to charge them nothing at all.