Tampering with charities’ business rates relief in Northern Ireland could jeopardise their good work and result in local charities losing £500,000 in funding, according to the Charity Retail Association.
The Northern Ireland Executive launched a consultation late last year that proposed reducing the existing 100 per cent mandatory business rate relief for charity shops to 80 per cent. The consultation closed yesterday.
A previous consultation, which ended in January 2016 questioned to what extent charity shops "have had a positive impact in the local area as they have led to a reduction in the overall retail mix and can represent competition for existing business".
In its response to the latest consultation, the CRA says it is unrealistic to expect charity shops to adapt to a new business rates system based on that used elsewhere in the UK because the Northern Irish sector "has developed in accordance with an existing system of rate reliefs with each shop’s business plan written with this system in mind".
The response says that reducing business rate relief for charity shops to 80 per cent would mean a 5 per cent fall in charity shop profits and £500,000 less a year for charitable causes, as well as a 16 per cent reduction in the number of charity shops.
The British Heart Foundation would be the hardest hit in Northern Ireland, with half of its charity shops at risk of closure as a result of the proposed changes to business rates, the response says.
It says that in the rest of the UK many charities receive the full 100 per cent rate relief and there is a "postcode lottery" in how the 20 per cent discretionary rate is applied.
The response adds that charity shops take up just 3 per cent of all charitable rate relief in Northern Ireland each year, but as a result of the rate relief are able to raise four times as much money for local good causes.
It says that charity shops also help to improve recycling, offer the unemployed and young people volunteering opportunities, combat social isolation and reduce vacancy rates on high streets.
The Charity Retail Association has also helped to establish the #MoreThanAShop campaign. It features 16 prominent charities and argues for the retention of the existing 100 per cent charity shop business rate exemption in Northern Ireland.