Charities in Wrexham are being given the opportunity by the Welsh Government to voice their opinions to an independent panel aimed at reviewing the business rates relief they currently receive on their properties.
Wrexham AM Lesley Griffiths has declared her support for the notion and will write to charities in the area asking if they could respond to the panel’s request. Business rates are a tax on the occupation of non-domestic property. Understandably, charitable and nonprofit making organisations are offered forms of relief which are administrated by local authority and they do not affect the ratable value of a property.
In brief, the reliefs on a charity and other nonprofit making oganisations are a mandatory 80% on their occupied properties. An additional discretionary relief, of up to 20%, can also be applied for. There is a realisation of certain retailers and landlords that there is a distinct advantage of having a charity organisation within their property. There are examples of charities and retailers attempting to work together to gain a mutual benefit.
The Charity Commission, the independent regulator of charities in England and Wales, is aware of cases where charities are being approached by retailers and landlords of hard to let property to enter into tenancy agreements that would relieve the landlords of the requirement to pay full business rates. Equally, some charities are actively marketing their willingness to enter into tenancy agreements with commercial landlords. However, although the idea appears positive in theory, it will be problematic in the long term.
The regulator is concerned that these charities may find themselves involved in what local authorities might consider to be business rates avoidance by landlords. This could potentially result in charities losing the discretionary discount and being required to pay 20% of the business rates.
Discrepancies and other complexities such as this have spurred the Welsh Government to act. There is a belief now that there might be reason to limit the relief of certain charities. The independent panel is keen for anyone who has experienced or been involved with this issue to express their opinions.
Responses are invited by email or post and the deadline is Wednesday 19th December 2012.The panel is particularly interested in views regarding the current levels of relief available to charities and what impact any change in relief would have. Any evidence or examples relevant to the panel will be gratefully received.
Commenting, AM Griffiths said “This is a significant issue which affects all our charitable organistations in Wrexham. I will be writing to every charity in Wrexham urging them to reply to the panel’s request to help rectify the outstanding issues.”
Responses can be sent by e-mail: firstname.lastname@example.org or by post to:
Department for Business, Enterprise, Technology and Science
Pontypridd CF37 5YR