Charitable Rates Relief

Non-domestic charity ratepayers may be entitled to 80% rates relief under Section 43 (6) of the Local Government Finance Act 1988. In order to obtain rates relief charities and amateur sports clubs can apply to obtain mandatory 80% rates relief if the premises are wholly or partially are used for charitable purposes.

Who can claim Charitable Rates Relief

A company occupying the property and looking to claim charity rates relief does not have to be a registered charity to pass eligibility criteria. The company must show that property will be used mainly for charitable purposes.

The property may be eligible for charitable rates relief if occupied wholly or mainly for recreation by clubs and companies established not for profit related activities. Also, for non-profit led companies occupying property whose main objectives are charitable, philanthropic, social welfare, science, literature, fine arts, religion or educational.

The charity organisation owning multiple retail properties that are unoccupied will also be eligible for charitable rates relief if it appears that next use of the property will also be wholly or partially for charitable purposes.

An application to the local authority must be made in order to obtain the charitable rates relief. The local authority within their right can request evidence to support that the property is or will be used for charitable purposes. The requested evidence can be in a form of financial statements if goods are sold the stock list and information on the origin of the goods.

If the property is occupied by the company raising money for charitable purposes it may not be eligible for mandatory 80% charitable rates relief if their stock contains mainly of new merchandise. In order to obtain a mandatory charitable rates relief property has to be used wholly or mainly for sale of gifted items.

If the charity has multiple properties in different locations, unfortunately there isn’t any centralised system to submit one bulk application and separate applications to relevant local authorities need to be made to obtain a mandatory 80% relief.

Discretionary Charitable Relief

If the property is eligible for mandatory charitable rates relief it may also be possible to apply for discretionary relief of 20% which can top up a total charitable rates relief to a 100%. Effectively making the property completely exempt from paying any rates to the local authority. The discretionary relief is awarded purely at the discretion of local authority and may be full 20% partial or none. The discretionary relief needs to be claimed every rating year which runs from 1st April to 31st March.