How can business rates best support charities?

The Scottish Government recently announced a review of business rates in Scotland to see how the system could better encourage investment and growth. The Barclay Review of Business Rates will cover all non-domestic rates in Scotland. So that means charity rate relief will be included. A strong third sector response to this is therefore vital, particularly if your organisation benefits from rate relief. Within the context of the Northern Irish and English reviews, the case for continued rate relief was made by a number of organisations. In both cases, the Government heeded these calls. At SCVO, we are in the process of considering our response and want to encourage other organisations to do the same.

our sector has strong views on rate relief and I’ve heard a number of issues and suggestions for change

At present, where an organisation is a registered charity, listed on the register maintained by OSCR, and the property occupied by the organisation is used ‘wholly or mainly for charitable purposes’, you may be entitled to mandatory 80% rates relief. Local authorities also have the discretionary powers to top this relief up to 100%. This rate relief for charities is justified in a number of different ways.  For example, the social capital charities and charity shops generate beyond their core objectives, through job creation, volunteering opportunities, recycling and training, is a key validation. Moreover, many state that charity shops add vibrancy to our struggling high streets and are not in direct competition with small businesses, as charity shops sell donated goods. So far, I’ve been in touch with a few organisations about this review. It’s clear that our sector has strong views on rate relief and I’ve heard a number of issues and suggestions for change. For example, perhaps your organisation has struggled to obtain rate relief across local authorities given the varied, distinct criteria in each place? In response to this issue, some organisations would like to see mandatory rate relief increased. This would mean that central government could grant charities 100% business rate relief. On the other hand, some organisations are worried about the further centralisation of taxation and would rather that localism was maintained, albeit with greater transparency and simplicity. Perhaps each local authority could publish clear criteria for the system of relief in their area? Alternatively, it might help if there was more unified criteria across Scotland’s local authorities? Whatever your view, this is your opportunity to have your say on business rates. Does your organisation support the status quo or would you recommend any changes to the system? The review is open until 7 October. If your organisation benefits from rate relief or you feel the system could work better, make sure you have your say. If anybody would like to discuss further, please get in touch with me. I’d be delighted to hear your views.