Scots private schools face £37m bill in move to axe tax breaks

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Scotland's private schools are facing substantially higher costs than initially feared under plans to scrap tax breaks for the sector.

It is likely to mean a bill of almost £37 million over the next five years as ministers move to end charitable relief from the institutions.

Fettes College in Edinburgh would be among the schools affected

Fettes College in Edinburgh would be among the schools affected

It had initially been estimated that the independent sector would be hit with a £5 million a year bill, but that is likely to be more than £7 million a year, according to documents published alongside the Non-Domestic Rates (Scotland) Bill.

Read more: Scottish Private schools' £5 million tax bombshell moves closer
Smaller, rural private schools could be hit with bills equivalent to around £500 or £600 per pupil, according to John Edward, director of the Scottish Council of Independent Schools.

“The idea that independent schools are full of the super-rich is simply not true. All of this money comes out of parents’ pockets," he told the Herald newspaper.

"These schools are not-for-profit.”

It could now result in fees going up, playing fields and other assets being sold off, as well as cuts to teacher numbers and grant funded assistance for poorer youngsters.

Read more: Scottish private schools to hike fees as tax relief set to end
Private schools are currently eligible for 80% mandatory rates relief if they are registered as a charity, but this will end under the shake-up of business rates. State schools do not qualify for charitable relief.

Based on a commencement date of 2020/21, ministers said the new rules would see private schools forced to pay £7m extra in the first financial year.

This would rise to £7.2m the following year, £7.4m the year after, £7.5m in 2023/24 and £7.7m the next year, taking account of inflation. In total, schools would pay £36.9m more in the first five years.