Sector seeks reassurances on business rate relief after Chancellor says councils will keep all the revenue

The Charity Tax Group, the Charity Finance Group and the National Council for Voluntary Organisations are looking for clarification of what this will mean for the tax relief charities currently enjoy

High street: what will the Chancellor's move mean for charities?
High street: what will the Chancellor's move mean for charities?

The sector is seeking clarity over charity business rate relief after George Osborne, the Chancellor of the Exchequer, announced that councils would be able to keep all the revenue from business rates rather than handing half to the Treasury.

The move, announced yesterday at the Conservative Party conference in Manchester, has led to uncertainty about whether charities will continue to get a mandatory national discount of 80 per cent on business rates, as well as the extra discretionary discounts offered by many councils.

Third Sector understands that when asked by conference delegates today whether the decisions on granting relief would be localised, Osborne replied that the issue had not been decided and would be looked into in more detail for the autumn spending review.

The Charity Tax Group has today written to Damian Hinds, the Treasury minister with responsibility for charity tax issues, asking for "urgent clarification" over whether business rates relief will be affected by the change.

The Charity Finance Group and the National Council for Voluntary Organisations have also asked Osborne to explain the impact on charities in a letter due to be released later today.

John Hemming, chair of the CTG, said: "A clear statement confirming that charity business rates relief will not be affected by this policy would help to allay concerns in the sector that this policy announcement could threaten this invaluable relief, which was worth £1.69bn to the sector last year."

Andrew O'Brien, head of policy at the CFG, said: "Devolution can be an opportunity for charities, but there are real concerns that devolution of rates could see charities lose their reliefs as local authorities make short-term savings.

"Business rates relief is our biggest tax relief and is critical for many organisations, which would struggle to deliver services without it. We must make sure this doesn't lead to unintended consequences for the sector."

The change is due to be phased in until 2020.

Sir Stuart Etherington, chief executive of the NCVO, said: "Business rate relief is a lifeline for charities – it helps many to maintain a presence on the high street and to provide critical services in your local communities.

"From village halls to hospices, it is no exaggeration to say that in many cases this relief is critical for their survival.

"We call on the Chancellor to urgently clarify his intentions and safeguard this vital relief, which enables charities and volunteers to continue their good work."

The Local Government Association has welcomed the government decision, which would allow councils to hang on to £26bn a year.

Gary Porter, chair of the LGA, said the move would give councils the "flexibility to reduce business rates for the types of shops and businesses that residents want in their high streets and neighbourhoods".

But a spokesman said he was unable to confirm what this could mean for charities, adding it would depend on the wishes of local residents.

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