Tuesday, November 11, 2008

4 Scottish Schools Threatened with End to Charity Status

The Edinburgh Journal reports that four of Scotland’s top private schools have been threatened with the loss of their charitable status if they fail to increase their spending on bursaries.

The four schools, which include Huthesons’ Grammar in Glasgow, Merchiston Castle in Edinburgh, Lomond school in Helensburgh, and St Leonards in St Andrews, have failed to meet the “public benefit test” needed for a charity. The Office of the Scottish Charitable Regulator (OSCR) stated that they have a year in which to put forward plans to expand bursaries to meet the test’s standards.

Jane Ryder, the regulator’s chief executive, said that they had failed “mainly due to significant fees and the fact that there was not sufficient help in place so that those who cannot pay the fees can also benefit from what the charity does.”

The schools which have been criticized fear the financial impact of losing charitable status. The 50 Scottish independent schools registered as charities save approximately £4.5m a year in taxes because they do not have to pay business rates or VAT. The sector claims that losing charitable status could force up their fees by between 5 and 8%.

30 charities were examined and assessed by the OSCR on their adherence to the 2005 law stipulating that every charity must pass a public benefit test in order to justify its tax breaks.

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