No Relief for Charities

Tim Jones, solicitor at our Long Eaton office, issues a warning to local charities seeking to benefit from statutory relief from National Non-Domestic Rates (more commonly known as Business Rates) in respect of premises owned or leased for charitable use. Charities in occupation of commercial premises qualify for a mandatory 80% reduction in Business Rates – which may increase to 100% at the discretion of the billing authority – provided that the premises are “wholly or mainly used for charitable purposes”.  As a result of a change in the law in April 2013 local authorities now retain a proportion of the Business Rates they recover, meaning that relief applications – and the extent to which premises are actually used by charities claiming relief – are likely to be subject to much closer scrutiny. Tim says “Merely having charitable status is not in itself enough to automatically qualify for rates relief; billing authorities will also expect charities to make extensive use of the premises for which relief is being claimed. We have noticed an increase in the number of charities being refused relief, which can lead to crippling financial consequences – in some cases charities have been rendered insolvent and folded completely. In certain circumstances charity trustees may even be exposed to personal liability for unpaid rates. The law relating to charitable relief is complex and in a state of flux. Any charity in dispute with a local authority concerning Business Rates liability should seek professional advice”.