How will private schools cope with impending £37m tax bill

First published in The Herald Scotland today by By Alistair Grant, Political Correspondent

Information released by the Scottish Parliament at Holyrood, proposals have been tabled to strip charitable relief away from independent schools.

Previously estimated at “… around £5m a year …” fresh documentation reveals the figure to be significantly in excess of that initially suggested amount.

If passed unamended, the unassumingly titled Non-Domestic Rates (Scotland) Bill would see independent private schools in Scotland being liable for in excess of an extra £7m in tax each year.

Year on year tax increases

The proposed additional taxable liability announced in the bill is as follows:

  • 2020/21 £7.0m
  • 2021/22 £7.2m
  • 2021/23 £7.4m
  • 2023/24 £7.5m
  • 2024/25 £7.7m

The total new liability within the first five years is expected to top £36.9m.

This new proposed legislation has come as a result of business rates carried out by former Royal Bank of Scotland chairman, Ken Barclay.

Concerns voiced

Director of the Scottish Council of Independent Schools, John Edward, commented that if implemented as drafted many smaller private independent schools would need to cover an additional tax bill amounting to approximately £500 to £600 per pupil.

Many members of the Scottish Parliament have also voiced concerns this bill is inequitable and requires amendment.

Scottish Conservative shadow education secretary Liz Smith MSP has already stated these proposed changes make “no sense whatsoever”.

Reduced capacity to offer bursaries

Paying this level of tax to the Government would seriously reduce the levels of bursary and financial assistace offered to parents of children applying for private school places.

Many are unaware but a significant proportion of parents of children at fee paying schools recieve a bursary to reduce the amount they pay.

Might UK Independent Schools be next in line?

Clearly, independent private schools in the UK, along with historic public schools, must also be concerned that the UK’s Parliament may be watching developments in Holyrood and might consider tabling similar tax changes that would affect them too.

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