Plans to end tax breaks for private schools come under attack

Plans to end tax breaks for Isle of Wight private schools came under attack yesterday evening.

A report signed by deputy council leader Cllr Ian Stephens proposed cabinet members recommend the exclusion of private schools from Discretionary Rate Relief (DRR).

DRR is a tax relief scheme which local councils can choose to grant to businesses, charities and organisations.

However, the Corporate Scrutiny Committee, yesterday evening passed a recommendation for private schools to continue to be allowed access to receive DRR.

Whitehall’s Ministry of Housing, Communities and Local Government will bring forward legislation to change the Local Government Finance Act 1988 to end private schools’ ability to claim charitable tax breaks from April 1.

In her autumn budget, Chancellor Rachel Reeves included plans to charge the standard 20 per cent rate of VAT on private school fees which took effect from the beginning of this year.

The cabinet paper pushing for private schools to be excluded from DRR said the government’s changes are ‘primarily’ about creating a ‘more equitable system’ and to bring private schools receiving charitable tax relief ‘in line’ with state schools.

But, Cllr Chris Jarman, of the Empowering Islanders group, who led the watchdog’s move, said: “I find it very odd that we would bring in such a measure and policy that would be targeting, in effect, only two schools on the whole of the Island.

“At least one of those schools I know has a number of sub-elements within it which are charitable concerns – not only a bursary scheme but charitable issues that they provide.”

Leader of the Isle of Wight Conservatives Cllr Ed Blake seconded the recommendation and told the committee: “Why are we doing this? They are not exactly Eton and Harrow – those schools – they are local providers of education that host a whole range of children, including some of them on bursaries.

“I would be against anything that hampers those schools’ ability to provide exceptional facilities not just for their own students but to the wider community.”

The cabinet paper said: “By not awarding discretionary rate relief to private schools that have lost charitable rate relief, the council ensures equality and fairness.

“This approach aligns with the broader legislative changes and national policy, creating a consistent financial landscape for all educational institutions.

“The potential removal of support to private schools through the DRR policy could lead to improved financial support for local state schools.”

Cabinet members will decide whether to recommend excluding private schools from DRR at its 5pm County Hall meeting on Thursday.

The proposal will then be taken to Full Council for a final vote at its March 19 meeting.

If approved, it will take effect from April 1.