Association of Charity Shops warns members over business rates

They must sell wholly or mainly donated goods in order to qualify for relief

Charities with shops should make sure they follow the rules on business rates relief because those that fail to do so are likely to be charged the full amount, the Association of Charity Shops has warned.

David Moir, head of policy and public affairs at the association, said that shops must be selling "wholly or mainly" donated goods in order to qualify for rates relief, which is administered by local authorities.

"There's no legal definition of this term," he said, "but it's generally taken to mean that more than half the goods sold must be donated."

He said that councils, under pressure to bring in more income as public finances became tighter, might start to check more carefully whether charities were entitled to rates relief.

Pesh Framjee, head of not-for-profit at accountancy firm Horwath Clark Whitehill, said charities that sold goods through trading subsidiaries could also fall foul of local authorities over rates.

"Trading subsidiaries are not eligible for rate relief," he said. "Only the charity itself is eligible."

All business premises are given a rateable value. The amount of business rates payable is calculated using the rateable value and the 'multiplier', which is set by the government.

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Association of Charity Shops

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