Charity leaders still fear for business rates discounts, despite contact from minister Damian Hinds

They fear Chancellor George Osborne's announcement that councils would be able to keep all revenue from the rates would affect the discount they currently get

Business rates: leaders voiced concerns
Business rates: leaders voiced concerns

Charity leaders have said they remain worried about the discounts to business rates after receiving a reply from Treasury minister Damian Hinds about their concerns.

Charity bodies including the Charity Finance Group, the National Council for Voluntary Organisations and the Institute of Fundraising raised concerns last month with George Osborne, the Chancellor of the Exchequer, after he told the Conservative Party conference in Manchester that councils would be able to keep all the revenue from business rates rather than handing half to the Treasury.

Charities are given a mandatory discount of 80 per cent on business rates and in many cases are offered a discretionary discount on the remaining 20 per cent by their council.

The umbrella bodies questioned last month whether Osborne’s announcement would mean the decision to offer the 80 per cent discount to charities would also be devolved.

In a reply to the concerned parties, Hinds said: "The announcement only related to the headline rate of business rates and did not make any changes to the existing system of reliefs and exemptions."

He said he was grateful for the submissions from charities to the business rates review consultation, which ran from 16 March to 12 June.

"I have asked officials to consider carefully the views of all charities and charity groups," said Hinds. The review would be completed by the end of the year, he said.

In response to Hinds’ letter, a spokesman for the CFG said: "We would be deeply concerned about any changes affecting mandatory rate relief.

"Cuts or loss of business rate relief would be a big blow to tens of thousands of charities, particularly small and medium-sized organisations, and would directly affect the front line.

"We continue to engage with the government, but would urge ministers to meet charity sector representatives personally to understand the potential impact of any changes before the spending review."

Osborne will present the spending review to parliament on 25 November.

An NCVO spokesman said: "Without mandatory rate relief, many charities of all sizes would find their costs increasing substantially.

"The government has acknowledged the value this relief represents for the sector and we will continue our dialogue with them to ensure it is protected."

In the letter to the Treasury, the NCVO and the CFG pointed out that business rates relief was worth more than £1.7bn to the charity sector in 2014/15.

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