The political debate over the role, status and taxation of independent (‘private’) schools in England shows no sign of abating. Two issues have attracted considerable attention in recent months: the prospect of VAT being added to independent school fees; and the charitable status of independent schools. In the first part of this research project – published in June 2023 – EDSK analysed the claim that adding VAT to fees would raise £1.6 billion a year, and found that such a policy was unlikely to raise such a significant sum and could end up raising very little money at all. This report – the second half of the same project – explores the issue of charitable status to understand why it has become so contentious in relation to independent schools and whether the suggestion that independent schools should be ‘stripped’ of their charitable status deserves consideration.
In any discussion of the charitable status and societal contribution of independent schools, it is important to recognise that the stereotype of these schools as large single-sex senior boarding schools is entirely unrepresentative of the sector as a whole. If you were to pick one of the 2,400 independent schools in England at random, you would be far more likely to encounter a co-educational primary day school with fewer than 300 pupils. Moreover, only half of independent schools even hold charitable status. These figures immediately raise questions about the general level of understanding of the independent school sector within political circles.
Further misconceptions are not hard to find, particularly in relation to the concept of charitable status. Some politicians and commentators clearly feel uncomfortable with the notion of an independent school being classed as a charitable organisation. In truth, the charitable status of some independent schools is unsurprising. There are two legal tests of whether an organisation is classed as charitable: first, it must have a ‘charitable purpose’; and second, it must be ‘for the public benefit’. In terms of the first test, ‘the advancement of education’ has been viewed as a charitable purpose since 1601 and remains codified in law as one of 13 permissible charitable purposes in the 2011 Charities Act. It is hard to imagine that any politician would relish the prospect of trying to argue that independent schools do not advance their pupils’ education. It is, though, the second test – on ‘public benefit’ – that has often been used to criticise independent schools, yet such criticisms are typically dogged by two fundamental misunderstandings.
