Business rates raised for charity-run private schools

Fee-charging schools run by charities will face higher business rates in Wales from April.

A total of 17 institutions will lose the 80% relief currently applied to their business rates, in line with Scotland and changes already planned for England.

The Welsh government said removing the "tax break" will "free up as much as £1.3m every year to support local public services".

Its own consultation said it was possible that a "small numbers of pupils may move to maintained [state-funded] schools" due to increased costs for parents.

VAT began being added to schools feels in January as part of plans by the UK government to raise cash for education in England.

The same government also plans to end business rate relief for charity-run schools.

In its consultation the Welsh government said the decision would bring the schools in line with those that do not have charitable status.

The aim, it said, was to make additional funding available for local services by "withdrawing a tax reduction for private education which is paid for from public funds".

Of 83 independent schools registered in Wales, 17 receive charitable rates relief.

The Welsh Independent Schools Council (WISC) warned in its response to the consultation that many schools "could not absorb the proposed five-fold increase in non-domestic rates".

"In the context of UK government policies... schools are already worried about their ability to continue operating," the response, written in November, said.

It said that overall the taxpayer would receive a "net loss" once the effect of "pupil movement and school closures is accounted for".

The Welsh government's consultation estimated the average relief lost to be worth £75,000.

"This is broadly equivalent to the average fee income from seven non-boarding pupils," it said, adding the additional liability was worth less than "2% of overall fee income".

But it admitted there was the "potential for small increases in costs for some parents" and that a "small number of pupils may move" into the public sector as a result.

If approved by the Senedd the change will come in on 1 April.

Mark Drakeford, Finance Secretary, said: "We believe independent schools with charitable status in Wales should be treated in the same way as those which are not charities.

"By removing this tax break, we can free up as much as £1.3m every year to support local public services."

Natasha Asghar MS, Welsh Conservative shadow education secretary said: "Labour is hitting independent schools with a triple whammy of higher taxes.

"After already announcing VAT on private and independent schools, an NI hike for employers and now ending the 80% business rate relief, Labour have turned their back on charity run independent schools."