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Does your charity qualify for Business Rates Relief?

Is the lack of other activity on the premises irrelevant?

A recent case South Kesteven District Council –v- Digital Pipeline Limited [2016] EWHC 101 (Admin) explored the issue of percentages of the premises used for charitable purposes and whether Business Rates Relief applied.

Business Rates Relief is available for occupied premises if the ratepayer is a Charity or the Trustees for the Charity, or the property is used wholly or mainly for charitable purposes (whether for that Charity or other registered Charities)

The Relief is 80% of the business rates liability and where this is mandatory the Local Authority must grant the relief to the occupying Charity. A Local Authority can also grant up to 100% of the business rates liability as discretionary relief.

There is a catch in that before the Relief is applied a determination must be made as to whether the Charity “wholly or mainly” use the premises for charitable purposes. It is not sufficient for the Charity to simply occupy the premises for a Charitable purpose.

The issues in South Kesteven District Council –v- Digital Pipeline Limited [2016] EWHC 101 (Admin) came about in the clarity of “wholly or mainly”. The Charity leased the premises and would hold occasional fundraising events to collect unwanted computer equipment to transport to Africa. In the Magistrates Court the Deputy district Judge determined that the premises were “mainly used for charitable purposes therefore the charity was liable for 20% of business rates on those days. This also meant that the Charity did not pay rates on days between the fundraising days, under the Unoccupied Property Relief Rules.

The Local Authority appealed this decision and the case was referred to the High Court. The Local Authority’s submission was rejected however in conclusion the District Judge was not entitled to take into account the fact that the premises were not being used for any other purposes, therefore the premises could not properly be said to be wholly or mainly used by the Charity. The High Court quashed the earlier decision and remitted the case to the Deputy District Judge for further consideration.

Don’t be caught out with your Charity Business Rates Relief – Our Charities Team has many years of experience working with Charities, as Legal Advisors, Clerks and Trustees if your Charity could benefit from our services please get in touch.