Tory MP says private schools should lose charitable status

On the Conservative Home website, Robert Halfon, chair of the Education Select Committee, says his party should confront this ‘shibboleth’

Robert Halfon, the Conservative chair of the Education Select Committee, has called for the end of across-the-board charitable status for private schools.

Writing for the Conservative Home website, Halfon, who is MP for Harlow and was skills minister between July 2016 and June 2017, says it is unclear why private schools should be regarded as charities and questions the purpose of granting them charitable status.

Halfon, who went to a private school, says that although many private schools offer bursaries, he is not sure whether they are actually reaching really low-income students and those from truly deprived areas.

“Through their charitable status, private schools get significant tax breaks, including concessions with VAT and business rates – and, of course, no corporation tax if they make a surplus,” he says.

“Is it fair that these tax advantages are available to public schools, though further education colleges and public sixth-form colleges have to pay VAT on their purchases? Yet these latter institutions really do provide a ladder of opportunity to those students from socially disadvantaged backgrounds.”

Halfon argues that private schools should therefore lose their charitable status and the money the government would have spent on charitable concessions for them should be used to fund teachers in outstanding inner-city schools.

“If we Conservatives are to be able to present and make the case for a moral and fair capitalism, we must not be afraid to take on a few shibboleths so that a fair-minded public will really believe us when the government have to take tough decisions on the economy,” Halfon writes.

“How much better would it be if it were Conservatives who counter-intuitively got rid of charitable status rather than leaving it to the left to claim the moral high ground?”

The article also questions the argument that private schools deserve charitable status because they save the Treasury money by educating children who would otherwise be taught in state schools.

Halfon says this logic would mean that “any private good purchased, over a state one, should then be offered charitable benefits in kind”, and would include private health and even homeowners in a broader-than-intended interpretation of charitable status.

Halfon’s article comes after the Barclay Review of Business Rates in Scotland told the Scottish government that private schools should lose their business rates relief because it was unfair on their state counterparts.

Research by the business rates firm CVS in June found that 586 charitable private schools in England and Wales would save £522m over the next five years because of their entitlement to the 80 per cent mandatory charitable relief on business rates.

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Private schools ‘will save £522m in business rates tax relief in next five years’

According to the business rates firm CVS, 586 of 1,038 private schools in England and Wales have charitable status and are therefore entitled to 80 per cent mandatory business rates tax relief

Charitable private schools will save £522m on business rates over the next five years because of their charitable status, according to new research.

The figures are based on requests to 132 councils made under the Freedom of Information Act by the business rates firm CVS, which found that 586 out of 1,038 private schools in England and Wales had charitable status and were therefore entitled to the 80 per cent mandatory business rates tax relief.

All charities are entitled to the 80 per cent relief from business rates, with a further 20 per cent available on a discretionary basis.

CVS also analysed government figures on private schools and found that 2,707 properties were classified as private schools.

These schools had a combined rateable value of £386.6m based on the last property assessment in 2010, but this has since risen by 19.6 per cent to £462.5m, CVS said.

CVS estimated that private schools could pay almost £1.2bn in business rates over the next five years if the business rates revaluation were to take place, but their charitable status meant that this figure would fall to £634.3m. 

CVS also released the figures for some well-known private schools that will save substantial sums over the next five years because of the business rates exemption.

For example, Eton College, which was attended by the former Prime Minister David Cameron, will pay £821,040 in business rates over the next five years, but would face a bill of £4.1m over the same period if it were not a registered charity.

Dulwich College in south London, which was attended by the former Ukip leader Nigel Farage, will pay £786,752 in business rates over the next five years, compared with a potential tax bill of £3.9m if it did not have charitable status, according to CVS.

Waverley Borough Council in Surrey grants the highest amount of business rate relief to private schools, the research shows, with five London boroughs also making the top 10.

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