By Altus Group | April 29, 2019

With the Scottish Parliament putting forward a Bill last week recommending that private schools in Scotland should no longer be able to claim charitable relief, it has emerged that their counterparts in England and Wales will receive over £200 million in business rates relief during the next 2 years until the next revaluation in 2021.

More than half of all private schools in England and Wales are registered as charities and receive lucrative tax breaks including mandatory business rate relief of 80%.

But state-run schools must pay normal business rates just like shops, offices and factories with the total bill in England and Wales estimated at £979.71 million for 2019/20 and £999.61 million for 2020/21 according to real estate adviser Altus Group.

Academies however have their costs, including rates, met fully, directly from Whitehall and are entitled an 80% discount as they similarly hold charitable status.

Altus Group say that, under the revaluation of business rates that took place in 2017, 2,726 private schools in England and Wales could have expected to pay £494.87 million in business rates during 2019/20 and 2020/21 until the next revaluation.

However, Altus Group forecast that with around 56% of all private schools registered as Charities with the Charity Commission that £271.37 million will actually be paid with £223.50 million being saved by private schools through their charitable status.

Robert Hayton, Head of business rates at Altus Group, says that it would be foolhardy to remove the relief but calls for parity with both private schools and academies saying, “It cannot be right that Council run schools pay normal business rates but both private schools and academies, using charitable status, receive an 80% discount. There should be parity so as to ensure a level playing field.

“Changing legislation to pick and choose which Charities receive relief isn’t the answer and removing the relief from private schools would surely discourage their charitable and altruistic activities, not to mention increase fees and demand for state school places.”

Altus Group say that Eton College, arguably Britain’s most elite school, which educated 19 former Prime Ministers including David Cameron, will have tax liabilities of £1.68 million in business rates during 2019/20 and 2020/21 but, given it’s charitable status, will pay just £336,600.

Dulwich College in South London, which educated former UKIP Leader Nigel Farage, will only pay £322,240 out of it’s £1.61 million 2 year bill for 2019/20 and 2020/21.


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