Articles

Chapter 4 – Changes to Private Schools Rates Relief

 

The connection between private schools and business rates in the UK is a complex issue, it involves considerations of charity status, public benefits, and local taxation policies.

 

In the UK, private schools are usually subject to business rates, but the specific rules depend on factors such as the school's charitable status and the use of the property.

 

Private schools receive at least 80% charitable relief. However, as of the 1^st April 2025, their entitlement to this relief will be removed. Private schools will be required to pay their full business rates liability and this increased liability will vary from school to school.

 

According to the Department for Education, the Government data has outlined 2,444 private schools in England, of which 1,139 are charities. However, the Government expects about 1,040 private schools will lose their business rates charitable relief.

 

These changes will lead to increased business rates for private schools, which therefore could affect their financial sustainability. It’s important that private schools undertake a strategic review of costs, as the loss of this relief could halt growth and cashflow for the private school.

 

Private schools business rates are not typically assessed based on receipt & expenditure. Its usually valued using either the Rating rental method or the contractor basis, which essentially takes the cost of running the private school into consideration.

 

As these changes have already taken affect, its vital that an experienced and pro-active rating agent is approcahed to oversee any potential risks, and ensure accurate budget planning for the rates liability.

 

The SHW Rating team are available to discuss your queries with regards to your private school. If you’re a private school and not sure about the accuracy of your business rates liability,  please contact Keirran Celestine.