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Independent schools will pay business rates under new law

Public finance minister Kate Forbes confirmed the move on Wednesday.

Classroom: Private schools will be made to pay business rates.
Classroom: Private schools will be made to pay business rates. Pixabay

Private schools will be made to pay business rates under a new law making its way through Holyrood, the public finance minister has confirmed.

Speaking at the Local Government and Communities Committee on Wednesday, Kate Forbes confirmed the move, which would come into force in September of next year to coincide with the start of the academic year.

First floated in April, it is the first time a date has been set for the law, which would be incorporated into the Non-Domestic Rates (Scotland) Bill, currently in its second stage.

Under the legislation, the schools would lose their charity relief unless they were responsible for teaching children with additional support needs.

Inclusion of fee-paying schools in non-domestic rate payments was recommended in the Barclay Review of independent schools.

Speaking before the committee, the minister said: "The Barclay Review implementation plan was published in December 2017 and it was clear that we would deliver the change by 2020 to allow time for those schools affected to plan ahead.

"The independent schools provisions are not currently identified for early commencement but I can confirm that it would be the Government's position to commence these provisions on September 1 2020, subject to the committee's decisions and votes."

She added: "A September 2020 commencement date would be almost three years after the change was first recommended in the Barclay Review and it would tie in with the academic year rather than the start of the financial year, which would hopefully help schools with their planning for academic year 2021.

"We've always been clear that we'll deliver this change, as recommended by the Barclay Review, and I would hope that confirmation of the Government's commencement intentions will assist the sector in its ongoing planning."

Following her statement, Green MSP Andy Wightman sought clarification, asking if this would mean the schools would have to pay rates from September 2020, to which the minister responded: "Indeed."

It is projected independent schools could be hit by a £37m bill in the first five years of the new legislation coming into force, if it passes parliamentary scrutiny.

The announcement comes as a row has erupted over who has the power to set the amount paid by businesses.

Mr Wightman has come under fire from government ministers due to his amendment in the Non-Domestic Rates (Scotland) Bill that would put the powers to set rates with councils, when it currently sits with the Scottish Government.

Finance secretary Derek Mackay said the inability of the government to set rates centrally would mean that up to 100,000 businesses would miss out on rates relief, something Mr Wightman denies is the case.

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