Cabinet members may decide later this week to follow the government’s lead in ending tax breaks for Isle of Wight private schools.
The Alliance administration will consider a proposal to exclude private schools from discretionary rate relief (DRR), a tax relief local authorities can choose to grant businesses, charities and organisations.
Whitehall’s Ministry of Housing, Communities and Local Government will put forward legislation to change the Local Government Finance Act 1988 to end private schools’ ability to claim charitable tax breaks from April 1.
Chancellor Rachel Reeves’s Autumn budget 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.
A cabinet paper signed by County Hall’s deputy leader, councillor Ian Stephens, says the changes are ‘primarily’ about creating a ‘more equitable system’ and to bring private schools receiving charitable tax relief ‘in line’ with state schools.
The plans would also create extra revenue for public services in England, the report adds.
It says:
“Crucially, the approach taken by the council in granting (DRR) is for the council to decide whether to bring local policy in line with legislative changes.
“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.
“It prevents private schools from seeking alternative forms of support that could offset the loss of mandatory relief, ensuring that the relief system remains equitable and focused on those most in need.
“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.
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