Private schools could be forced to sell sports fields as Labour’s VAT raid increases financial pressures

By ELEANOR HARDING, EDUCATION EDITOR FOR THE DAILY MAIL

Published: | Updated:

Private schools may be forced to sell off their sports fields to make ends meet in the wake of Labour’s tax raid, experts warn.

From April, the business rates exemption for independent schools will end, meaning they will face much bigger tax bills.

Those with playing fields and playgrounds will likely pay more due to how the tax is calculated, the Treasury has previously said.

However, if schools sell off these grounds it will mean they can no longer be shared with state schools and other community groups, as is currently the case.

David Woodgate, chief executive of the Independent Schools’ Bursars Association, said: ‘In the light of the financial shocks, schools will be reviewing their operating models.

‘One option, for those schools that have them, is to consider selling some of their property assets to bring in cash.

‘A prep and a senior school could merge onto one site and then sell off the other site, for example.

‘You would then have less property which would be liable to business rates.’

Private schools may have no choice but to sell off sports fields amid financial pressures following Labour’s VAT raid on fees (file image)

Sold off school grounds would also mean they can no longer be shared with state schools and local community groups as many are now (file image)

He pointed out that private schools often work with local state schools and community groups to make their facilities available – but said this work could be at risk.

He told the Sunday Telegraph: ‘If this partnership work were to stop, the local communities would be the worse for it. Our schools don’t tend to have lots of surplus facilities – selling anything off, such as land or buildings will inevitably have an impact on something else.’

The ending of business rates relief for private schools comes on top of Sir Keir Starmer’s controversial move to apply 20 per cent VAT to private school fees, which came into force on Jan 1.

Labour says the money from the taxes will pay for 6,500 new teachers and other improvements for state schools.

Last year, responding to a parliamentary question from Conservative MP Kevin Hollinrake about how business rates for private schools will be calculated, James Murray, the Treasury minister, said: ‘All intrinsic physical characteristics of the school are taken into consideration, and both sports playing fields and playgrounds are material considerations which positively impact the calculated rateable value.’

Following the end of the business rates relief, schools will be handed bespoke bills linked to the value of the property (file image)

Mr Hollinrake said that ending business rates relief for private schools risks leading to ‘perverse consequences’.

He added: ‘They might have to divest themselves from playfields or other facilities that are very important to young people and their parents. It is shocking.’

Under the plans, each school will be handed a bespoke bill for business rates, which is linked to the value of the property.

It is understood a total of 60 schools face a business rates bill of over half a million pounds, including Eton College, St Paul’s School, Dulwich College and Harrow School.

A Government spokesman said: ‘Ending tax breaks for private schools will raise £1.8 billion a year by 2029/30 to help deliver 6,500 new teachers and raise school standards, supporting the 94% of children in state schools to achieve and thrive.’

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