Private school teachers could lose the highly prized benefit of discounted places for their offspring when new public benefit tests come into force.
Up to pound;100 million a year is spent by independent schools on subsidising places for the children of their staff, according to figures compiled by accountancy firm Horwath Clark Whitehill. This represents almost a fifth of all money spent on concessions, including bursaries and scholarships. Some independent schools are already considering phasing them out.
The Charity Commission will begin discussions with private schools next month about public benefit tests, which they will need to pass in order to retain their charitable status.
Private schools will come under pressure to offer more places to children from poorer backgrounds if they want to qualify for tax breaks. Harrow School recently announced it was aiming to raise pound;40 million by 2012 to provide more bursaries to boys from poor homes.
But money spent on subsidising the children of staff is unlikely to count towards this aim. A test case in Scotland, which is further along in its review, ruled that such staff discounts did not contribute to public benefit.
Jonathan Cook, general secretary of the Independent Schools' Bursars Association, said: "Benefits such as the staff fee discount will definitely come under scrutiny. It will be difficult for schools to change the contracts of existing staff, but new teachers could be affected. Employment contracts will be part of a wider review of costs, including teacher-pupil ratios and the number of subjects offered at A-level."
In its survey, Horwath Clark Whitehill heard from schools that teach 44 per cent of children in private education. They revealed that they spent almost pound;41 million on fee assistance for staff in 2006, 18 per cent of the total bill for concessionary places.
The survey includes responses from all the major boarding schools, which offer larger discounts than average day schools.
The discounts are a tax-free benefit to staff, as long as the reduction in fees does not exceed 85 per cent.
Bernard Trafford, president of the Headmasters' and Headmistresses' Conference, which represents some of the most elite and richest private schools in the country, said there were strong arguments for offering discounted places to staff. "It's not a case of us all scratching each others' backs. It's about retaining the services of the best staff. It gives you incredible buy-in from staff," he said.
The Girls' Day School Trust, which runs a family of 29 independent schools in the UK, does not offer any staff fee discounts.
Some independent schools have already scrapped discounted places for the siblings of current pupils.