Charity shop tax relief rules will remain unchanged, says government

The government has rejected a recommendation from the Business, Innovation and Skills select committee that the blanket reduction of 80 per cent relief be changed

Charity shop
Charity shop

The government says it has no plans to change the rules regarding business rate relief for charity shops and will not be changing the definition of what constitutes a charity shop, according to its response to recommendations from the Business, Innovation and Skills select committee.

The committee published a series of recommendations in March after it conducted an inquiry into the UK retail sector.

These included that the government review the "blanket reduction" of 80 per cent rate relief to all charities that use premises for charitable purposes because the system was vulnerable to loopholes and might cause unfair competition between charities and other retailers, such as book shops.

It also suggested that the government come up with tighter definitions as to what qualifies as a charity shop.

But the government response, published this week, says it will not change the rate relief rules. "The government agrees with the select committee that charitable organisations play an important role in our local communities," it says.

The Charity Retail Association said it was unsurprised at the government’s decision. "We never saw this as a really major threat," said Warren Alexander, chief executive of the CRA. "Charity shops receive less than 0.3 per cent of all rate reliefs that are given to business – so it’s really tiny.

"The public are overwhelmingly in favour of charity shops. About 80 per cent of people say they like charity shops and they deserve their rate relief. There are some critics out there, but the general public and the political landscape, certainly as far as this government is concerned, is really in favour."

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