Schools: Business Rates

Department for Education written question – answered on 1st July 2022.

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Photo of Cat Smith Cat Smith Labour, Lancaster and Fleetwood

To ask the Secretary of State for Education, what comparative assessment he has made of the levels of business rates paid by state schools and independent schools which have charitable status.

Photo of Robin Walker Robin Walker The Parliamentary Under-Secretary of State for Scotland, Minister of State (Education)

The department has done no comparative assessment between the levels of business rates paid by state schools and independent schools which have charitable status.

Currently, 80% mandatory rates relief is applied to academies, voluntary aided schools, and foundation schools. The majority of special schools also receive full relief because they make provision for children with a disability. In addition, under the Local Government Finance Act 1988, local authorities are permitted to grant relief against the business rate liability to certain charitable and non-profit organisations. Local authorities are able to offer discretionary relief for local authority-maintained schools in their area.

Local authorities receive funding for business rates through the national funding formula, to meet the full costs of schools’ business rates. This means the costs for local authority maintained schools’ and academies’ business rates are currently covered by the department. Therefore, there is no disadvantage to state funded schools from paying full rates, or advantage from receiving rates relief.

Charities can apply for charitable rate relief of up to 80% if a property is used for charitable purposes. Around half of independent schools are charities so enjoy at least 80% relief on business rates. The rest are private business and therefore do not benefit from such discounted business rates.

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