The Treasury has said that it will maintain the 80 per cent mandatory business rates relief for charities, according to the Charity Tax Group and the National Council for Voluntary Organisations.
There were widespread concerns across the charity sector before today’s Budget about the potential for the rate relief to be removed or reduced as part of changes to business rates announced in the Budget today.
But the CTG and the NCVO said Treasury officials had confirmed to them separately this afternoon that the government had decided to retain the mandatory relief, which is worth about £1.5bn a year to charities.
Changes announced today include raising the threshold at which small business rate relief applies from a rateable value of £6,000 to £15,000. This will mean 600,000 small firms will pay no rates, according to George Osborne, the Chancellor of the Exchequer.
The government will also raise the threshold at which business rate bills in England are calculated using the standard business rates multiplier from £18,000 to £51,000.
The changes will reduce the business rates burden by £6.7bn over the next five years, according to Budget documents published today.
A spokeswoman for the NCVO said the increase in the higher rate threshold would benefit charities in properties with rateable values of between £18,000 and £51,000, which will therefore be moved out of the higher rate. She said this would reduce the remaining 20 per cent of charities’ business rates bill that is not subject to mandatory relief.
But the CTG voiced concerns that the discretionary rate reliefs from local authorities, which some charities receive on 20 per cent of business rates that are not subject to mandatory relief, are likely to be squeezed.
John Hemming, chair of CTG, said: "This has been an interesting, tidying-up Budget with some important announcements, the most significant of which is the assurance we’ve received from Treasury officials that the 80 per cent mandatory business rate relief that is given to charities will be maintained, which is very welcome.
"Some charities may also benefit from the extension of the small business rate relief, although discretionary rate relief for charities is likely to be squeezed again."
Neil Cleeveley, chief executive of local infrastructure umbrella body Navca, said the business rates reforms would impact on local authorities, and consequently funding from councils for charities.
He said: "Previously the Chancellor said that local authorities' funding will primarily be from retaining business rates. Local authorities have been a major funder of smaller charities. Permanently doubling the Small Business Rate Relief and extending thresholds will cost £1.5bn a year. We fear this will result in further cuts to local government funding, which is likely to disproportionately hurt smaller charities."
Nick Temple, deputy chief executive of Social Enterprise UK, said social enterprises would "welcome many of the announcements aimed at helping small and medium sized businesses".