Mandatory charitable relief
Section 43 (5) and (6) of the Local Government Finance Act 1988 provides that where the ratepayer is a charity, or a trustee for a charity, and the property is used wholly or mainly for charitable purposes, the ratepayer will be entitled to 80% relief from their business rates bill. Therefore, their liability will be 20% of the full charge.
Section 67 (10) of the Local Government Finance Act 1988 defines a charity as an institution or other organisation established for charitable purposes only, or any persons administering a trust established for charitable purposes only.
Confirmation of charitable status may not always be easy to determine, and therefore four general principles have been established. They are that it should be one of the following:
- a trust for the relief of poverty
- a trust for the advancement of religion
- a trust for the advancement of education
- a trust for other purposes which are beneficial to the community
Reference is also made to case law.
Charity shops
Section 64(10) of the Local Government Finance Act 1988 provides that charity shops are entitled to mandatory relief if they use the premises wholly or mainly for the sale of items donated to the charity, and where the net proceeds of the sales from the goods are applied to the purpose of that charity.
Legislation does not define " wholly or mainly", and therefore the basis of more than half is used.
There is no requirement for an application for mandatory relief to be made in writing.
The Non-Domestic Rating Pool funds 100% of the relief granted.
Community Amateur Sports Clubs
Community Amateur Sports Clubs (or CASCs as they are more commonly known) are also entitled to 80% relief from their rates bill. This is provided that the CASC is registered with the Inland Revenue.
Discretionary relief
The council, under Section 47(a) of the Local Government Finance Act 1988, has the discretion to remit all or part of the remaining 20% if the ratepayer is a charity or trustee for a charity, and if the property is wholly or mainly used for charitable purposes.
Section 47(a) of the Local Government Finance Act 1998 provides that discretionary relief may be allowed:
- Where all or part of the hereditament is occupied for the purposes of one or more institutions or other organisations which are not established or conducted for profit
and
- Where its main objectives are charitable or are otherwise philanthropic or religious, or concerned with education, social welfare, science, literature or the fine arts
For more information on any of the above, or to obtain an application form, please contact the council's Business Rates Section on 0345 678 9003, or email business.rates@shropshire.gov.uk