Schools guidance must be corrected
Guidance on how private schools justify their charitable status must be "corrected", judges have ruled after concluding that parts of the Charity Commission's guidance were "erroneous".
The Independent Schools Council (ISC), which brought the case, said it is "delighted" that the Upper Tribunal has ruled in its favour.
The ISC represents eight organisations collectively educating almost half a million children in 1,270 schools, of which approximately 980 are charities.
It had argued that the commission's guidance must be quashed because it was too vague, and claimed the commission was guilty of "micro-managing" individual charities. The commission had argued that its guidelines were clear and it had only provided "supportive assistance" to help charity trustees keep their charitable status.
It is understood that following the ruling, there needs to be an agreement from both parties on how the guidance is changed. If an agreement is not reached, there could be another court hearing to decide if the parts of the guidance challenged by the ISC should be quashed and rewritten, or amended.
Matthew Burgess, ISC's general counsel, said the organisation would be seeking to have the parts of the guidance contested quashed. The Charity Commission insisted that the tribunal's decision had confirmed its interpretation of the law on public benefit and private schools.
The case before the Upper Tribunal centred on the 2006 Charities Act which removed the presumption that all charities providing education also provide a public benefit. Under the new rules private schools must prove they benefit children who cannot afford their fees in order to keep their charitable status and the tax breaks that come with it.
Mr Justice Warren, president of the Upper Tribunal (Tax and Chancery Chamber), sitting with Judge Alison McKenna and Judge Elizabeth Ovey, said they had "every sympathy" with the Charity Commission "in the difficulty of the task it faced in producing guidance on this area of the law".
It concluded that a charitable independent school would be failing to act for the public benefit if it failed to provide some benefits for its potential beneficiaries other than its fee-paying students.
It also decided each case depended on its own facts and it was a matter for the trustees of a charitable independent school - rather than the Charity Commission or the tribunal - to decide how trustees' obligations might best be fulfilled in the light of their circumstances.