Independent schools should be stripped of an estimated £136m in charitable rate relief, according to the Labour MP Simon Danczuk.
Figures from the Valuation Office Agency released by Danczuk’s office show that independent schools have a combined rateable value of £361m. His office calculates that this would require schools to pay £170m a year in business rates, but charitable reliefs reduce this to £34m.
Danczuk, the Labour MP for Rochdale, told Third Sector it was wrong that many wealthy institutions with charitable status received rate relief while small businesses were struggling.
"Small businesses up and down the country are being pushed over the edge because of high business rates," he said. "There is a growing consensus now that this is an unfair tax and we need a proper debate about who is eligible for rate relief.
"I’m of the view that some organisations benefiting from rate relief should not be receiving it. Independent schools, such as Eton, are one example. But there are other candidates too.
"For the charity sector to be robust and continue to enjoy high levels of public confidence, we need a fair assessment of what’s deemed to be a charity. It seems wrong that commercially focused organisations such as Eton, which are geared towards meeting the needs of some of the most privileged people in society, are deemed to be charities – and receive business rates relief.
"Quite simply, they do not need this relief and I resent the fact that small businesses in my constituency have to subsidise them."
Third Sector contacted the Independent Schools Council for comment this morning but did not receive a response.