The Scottish Government in its recent budget announced that Scotland's independent schools are set to lose their charitable rate relief from 2020-21 after the Government approved recommendations made in the Barclay Review of Non-Domestic Rates in Scotland.
The Barclay Review had earlier this year recommended that independent schools with charitable status should no longer benefit from reduced or nil rates. As it stands, independent schools with charitable status are entitled to 80% relief from non-domestic rates, with the potential of 100% relief at the relevant local authority's discretion. The Barclay Review and the Scottish Government concluded that the present position leads to inequality when compared with the position of local authority schools that do not benefit from such relief.
Although it has been anticipated for some time that the current Government would seek to curtail the benefits of charitable status for independent schools, the rate relief announcement will come as concerning news for those independent schools affected. Their representatives have expressed concern that the change will result in less generous bursary support being available and a rise in school fees.
The removal of charity rate relief for independent schools will no doubt contribute further to a wider debate around which organisations are entitled to charitable status and the tax advantages that go with it.
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