Tribunal fails to clarify public benefit test for schools

17 October 2011

The Upper Tribunal Tax and Chancery Chamber has ruled that private fee-paying schools can qualify as charities if their trustees offer poor students more than “token” help with fees.

Private schools’ charitable status was put at risk by the Charities Act 2006, which introduced an explicit public benefit test. The Charity Commission then introduced guidance suggesting that many schools would not meet this test. The Independent Schools Council, representing private schools, challenged this guidance in a judicial review, and the Attorney General referred the case to the Upper Tribunal for a resolution.

The Tribunal’s decision, however, does not offer schools much help, except by stating explicitly that “a trust which excludes the poor from benefit cannot be a charity … when we refer to a school failing to act for the public benefit, we mean that it is making inadequate provision other than the provision of education to fee-paying students”. The Tribunal deliberately refused to define adequacy, other than excluding “a token benefit for the school to be able to point at in order to cock a snook at the Charity Commission”.

The Charity Commission said: “It will be a difficult message for some schools to hear that there can be no specific threshold or benchmark which is deemed sufficient to demonstrate public benefit.”

But the Independent Schools Council welcomed the ruling as “”ensuring that responsibility for public benefit decisions is taken away from the Commission and returned to governors.”



BAILII (Tribunal decision)

Judiciary of E&W (Tribunal decision as PDF)

Independent Schools Council

Charity Commission

Charity Commission (2)

BBC News


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