Welsh government consults on proposal to reduce business rate relief for charity shops

Charity Retail Association warns the move could cause up to a third of charity shops in Wales to close

Charity shops
Charity shops

The Welsh government has launched a consultation on whether business rate relief for charity shops should be reduced.

Views are being sought on whether the level of relief – 80 per cent – should be changed and the effect this might have on charities and businesses.

The Welsh Business Minister, Edwina Hart, has appointed Brian Morgan, professor of entrepreneurship at Cardiff Metropolitan University and author of the Business Rates Wales Review, which proposed limiting tax relief for charity shops, and Juliet Luporini, economic chair of Swansea Business Improvement District to carry out the investigation.

The Charity Retail Association has warned that an increase in charity shop rates could seriously affect hospices and charities in Wales.

According to the association, capping the number of charity shops and reducing the rate relief they receive could cause up to a third of charity shops in Wales to close and put 200 jobs at risk.

In a joint statement with WCVA and Hospices Cymru, the CRA said: "Any reduction to the vital rate relief that charity and hospice shops receive will be a direct reduction in the amount of money they are able to put into services to Welsh communities, and the inevitable closure of charity shops will do nothing to help the high street at a time when Welsh town centres already have a vacancy rate of 15 per cent.

"Charity shops are keeping the high street alive in many areas, providing landlords with stable rental income, investing in shopping parades and encouraging footfall. We hope that Professor Morgan and the Welsh Assembly Government will listen to the evidence and reject damaging proposals to restrict charitable income in Wales." 

Morgan said: "We will be focusing in particular on whether the relief available to charities should be limited in certain circumstances, and will also examine whether social enterprises and credit unions could meaningfully benefit from reliefs.

"This area has created significant interest and we want to hear the views of all interested parties."

Morgan said there would be a further opportunity for consultation that will bring together charities and businesses before the response is submitted to Hart in the new year.

The deadline for responses to the consultation is 19 December. They can be emailed to businessrates@wales.gsi.gov.uk.

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