A local authority in Wales has been consulting on whether to end the discretionary rate relief for national charities that operate shops in the area in order to make savings of £105,000.
Pembrokeshire County Council launched an online consultation on its website in December to help determine whether it should focus discretionary rate relief on local organisations.
Both local and national charities are eligible for 80 per cent mandatory rate relief from central government, but local authorities can choose to grant the remaining 20 per cent rate relief at their discretion.
Pembrokeshire pays 75 per cent of the discretionary part of the relief, which amounts to £115,000 for locally based charities and about £105,000 for national organisations.
The consultation closes today and recommendations based on the feedback will be decided by the council’s cabinet at a meeting on 16 March. Any changes to rate relief would take effect from 1 April 2016.
The council has been inviting views from the public and organisations on how to determine what constitutes a local organisation and whether organisations that operate a federated structure, such as Citizens Advice, should be considered local.
It also wants to know whether it should prioritise its financial support to registered charities or to community amateur sports clubs.
The council also plans to launch a consultation this year on changing its approach to discretionary rate relief that is offered to non-charity and non-CASC, not-for-profit, philanthropic organisations, and recreation or sports clubs.
According to its website, the earliest that any changes could apply is 1 April 2017.
A spokesman for the Charity Retail Association, which in its consultation response argued against the proposal, said that charity shops had a strong positive effect in Pembrokeshire and Wales as a whole because of the important work they funded and the social impact they provided, such as providing recycling schemes and jobs and training.
He said that reducing rate relief could cause charities to move out of the area or not open, and that a number of national charities – particularly those specialising in health issues – found it insulting that they might not be considered as local organisations despite their contribution to improving local health provision.
"We support a wholesale review of the rates system to make it fair and encourage high-street regeneration, rather than taking away from charities," he said.
John Hemming, chairman of the Charity Tax Group, said: "Business rates relief is a vitally important relief for charities. We appreciate that the cost of discretionary rate relief might be difficult for some councils, but we can see no justification for different treatment of local and national charities. Whether a charity is national or local is irrelevant – the council should support all charities that operate in its area and benefit its citizens. Arbitrary distinctions are unhelpful and unfair and risk potentially running foul of state aid rules."
Calderdale Borough Council in West Yorkshire ended discretionary rate relief for national charities in February last year with a view to saving £50,000.