Belfast Telegraph

Private schools 'get £522m business rates subsidy thanks to charitable status'

Taxpayers are giving private schools a £522 million subsidy on their business rates bills thanks to their controversial charitable status, new research has shown.

M ore than half of all 2,707 private schools in England and Wales are registered as charities and can receive rate relief of 80% - including some of the most elite schools in the country, according to business rent and rates specialists CVS.

It estimates this lucrative tax perk means private schools will pay £634.3 million in business rates out of a potential £1.16 billion bill over the next five years, saving a whopping £522.3 million.

But their tax break comes as local authority-funded state schools are charged business rates in full.

Research by CVS found that Eton College, which educated 19 former prime ministers including David Cameron, is among those offered the biggest relief under its charitable status, saving a mammoth £3.3 million over the next five years.

Berkshire-based Eton will pay just over £821,000 out of a £4.1 million bill over the next five years .

Dulwich College in south London, whose alumni include former Ukip leader Nigel Farage, will only pay £787,000 out of its £3.9 million five-year rates charge.

Mark Rigby, chief executive of CVS, told the Press Association: "It cannot be right that council-run schools pay normal business rates, but 56% of all private schools, using their charitable status, receive an 80% discount."

He repeated calls for a review of the business rates system, which he said must be made "fairer and more sustainable in the long term".

Under the Freedom of Information Act, CVS asked all 34 7 councils in England and Wales to provide details of tax relief given to private schools.

It said 132 councils provided full replies, revealing that 586 out of 1,038 private schools held charitable status and were afforded mandatory business rates relief.

Based on these findings and further research, CVS estimated that 56% of all private schools held charitable status.

The Department for Communities and Local Government said private schools seeking charitable status " must meet a robust public benefit test".

It also said academies, foundation schools and voluntary-aided schools automatically qualify for charitable status, while insisting that state school funding accounts for the cost of business rates.

There has already been uproar over private schools using their charitable status to avoid paying VAT at 20% and Labour has been campaigning to remove this exemption to help increase state school funding.

Andrew Harrop, general secretary of left-leaning think tank the Fabian Society, said the same should apply to business rates.

He said: "Private schools should be treated as businesses rather than charities for business rates and VAT."

"The extra money from business rates paid by private schools could be earmarked for education for all children - g iven the pressure that state schools are under, it would be very welcome," he added.