Government rejects proposals to reduce tax relief

Charities have been spared from Sir Michael Lyons' recommendation to end some of their tax reliefs.

Lyons outraged charities with his inquiry into local government, published last week, which proposed ending the 80 per cent relief in business rates for charities. Charity shops, offices and historical buildings would have been affected.

On the same day, Phil Woolas, the local government minister, said: "We have no plans to change the existing relief given to charities."

Stephen Bubb, chief executive of Acevo, who lobbied against the proposals, said: "It was like having an incendiary bomb lobbed at us."

The Federation of Small Businesses urged the Government to proceed with Lyons' recommendation to review charity business rates, but only for charity shops that sell new goods.

"Where charity shops are selling new products, they are competing against our members on an unfair playing field," a spokesman for the federation said. "They don't have the same costs as anyone else." He stressed that the federation was not anti-charity.

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