2015 marks the 10-year anniversary of the introduction of the Charities and Trustee Investment (Scotland) Act 2005 - the Act which created the test which organisations must satisfy to be registered as a charity in Scotland. Now, MSPs from the public petitions committee have indicated they believe it is an "appropriate" time for the Scottish charity test to be reconsidered.
The comments were made at a debate on the petition lodged by Husband Powton. While the petition relates only to fee-paying schools, the discussion turned to MSP's concerns that more organisations are seeking charitable status because of the tax benefits which go along with it. Labour MSP Hanzala Malik stated that "It has become fashionable to become a registered charity to avoid paying various taxes, and the Parliament needs to look at that again."
Representatives of the Office of the Scottish Charity Regulator (OSCR) were asked to speak at the committee meeting. OSCR's head of engagement Judith Turbyne told the Committee "At the moment, the test is workable. We have made technical suggestions to ministers on matters that we want to change. We are favourable towards reviewing the Act. We are coming up to 10 years since the Act was established, so we are very pro that, but that would have to take into account all the different sectors." Taking OSCR's views into account, the Committee concluded that it should write to the Scottish Government and ask for confirmation of whether or not a review of the Act is planned.
The Committee's conclusions have been welcomed by the Scottish Council for Voluntary Organisations (SCVO). Its director of public affairs John Downie commented that “We need to rethink the charity test and think carefully about whether private schools really earn their charitable status and its accompanying tax relief. But they are not the only group who should be up for review…". SCVO's comments have understandably been met with dismay by the Scottish Council of Independent Schools (SCIS). SCIS were observers at the meeting but have not, as yet, commented directly on the matters raised. However, their response to the petition has been clear and unequivocal. Their director John Edward concluded "In terms of demonstrable activity, detailed regulation and official policy, the status of independent schools on the Scottish Charity Register is clear, as are the responsibilities and duties that entails. Popular perceptions of what is meant by “charity” may be well removed from broader legal definitions in the 2005 Act and preceding law. However, every school’s founding philosophy or ethos is based on their charitable purpose – the education of the child - not on regulatory compliance or legal definition."
Whether the Committee's approach to the Government together with OSCR's own calls for a review of the Act will lead to a review is difficult to predict. What is clear is that the status of independent schools has contributed to a wider debate around which organisations are entitled to charitable status - and the tax advantages that go with it.
On New Year's Eve we reported that OSCR had published its final report at the conclusion of the regulator's review of the charitable status of the fee-paying schools in Scotland. 2015 is already showing that those who thought that the end of OSCR's review meant the end of the debate were mistaken.
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