Private schools escape threatened withdrawal of charitable status

12 July 2010

The Charity Commission has agreed that two private schools can retain their charitable status (and thus their tax exemptions), after the schools agreed to offer free places to a handful of pupils.

Last year, the Charity Commission published critical reports on the two schools, St. Anselm’s in Derbyshire and Highfield Priory in Lancashire. The Commission said it did not regard the schools as meeting the “public benefit” test set out in the 2006 Charities Act, and  said their charitable status was under review.

The Independent Schools Council – which represents 1200 private schools that collectively claim several hundred million pounds in tax rebates every year – then sought judicial review of the Commission’s threat.

However, in the meantime, the two schools have persuaded the Commission to confirm their charitable status, by offering more bursaries to pupils who cannot afford the tuition fees. St. Anselm’s has increased its bursaries from 3 to 6 and Highfield from none to 15. A bursary is typically worth over GBP10,000 a year.

The ISC has not dropped its litigation, which is in the early stages of seeking leave to apply for review. It expects to hear soon whether permission has been granted, and meantime issued a statement noting there was still a need for “definitive legal clarity” on the 2006 Act’s public benefit test.

“Given the widespread controversy caused by the Commission’s approach, it is important that it should be tested at law”, said ISC chief executive David Lyscom. Describing the Commission’s interpretation of public benefit as “too narrow and deeply flawed”, Lyscom claimed that most prominent charity law experts believe the Commission is incorrectly interpreting the Act and long-standing case law.

“The Commission’s approach focuses on public benefit linked to the prevention or relief of poverty while ignoring that for the advancement of education”, he said. “But both are charitable purposes under the Act.”


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