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