Private Schools “Should Give More Back or Lose Tax Break”

According to Alan Milburn, the government’s social mobility tsar, independent schools should be stripped of their charitable status if they refuse to sponsor an academy.

Speaking in an interview earlier this month, Mr Milburn claimed that the charitable status for private schools was “basically a tax break” which was unjustified unless they “gave something back.”

The former Labour cabinet minister – who was one of the advocates for tightening the charity law for private schools in 2006 –said during the interview: “Frankly the tax break shouldn’t be given just because on occasions the private school opens its playing field to the state school. It’s got to go beyond that.

“I think the Charity Commission got it wrong in the way they interpreted the public benefit test. I would make a condition of charitable status for private schools that, for example, they sponsor a city academy. That’s putting something back.”

Mr Milburn went on to say: “There might be other things they could do – take more kids from disadvantaged areas, for example. We’ve got to move for a something-for-something deal.”

However, his comments have provoked anger from leaders of independent schools, with the chairman of the Independent Schools Council, Barnaby Lenon, saying that the schools had spent “six years of being messed about by the Charity Commission”; before adding: “The rules have been recently clarified and we would not welcome any further interference.”

Under charitable status, independent schools can pay lower business rates and avoid tax on trading surpluses and they can also use gift aid to reclaim tax on donations. However, they’re not allowed to reclaim VAT on premises and teaching materials unlike other schools and academies.

As an accountant, Gill Freeman specialises within academy finances and charity tax.

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