Mandatory rate relief
Charities in occupation of a property are entitled to 80% mandatory relief from their rates bill, providing the property is used wholly or mainly for charitable purposes. This leaves a liability of 20% of the charge, although relief up to the remaining 20% may be applied for under the discretionary scheme. Registration with the Charities Commissioners under the Charities Act 1993 is conclusive evidence that an organisation is a charity. Certain bodies which under the 1993 act are excepted from registration or are exempt charities are also eligible for mandatory relief as well as sporting organisations that are registered as Community Amateur Sport Clubs (CASCs). If the organisation is not a registered charity, you should include documentary evidence such as the memorandum and articles of association to show that its main objectives are charitable.
Relief will be at 80% of the rates charged and will continue from year to year, or until such time the property ceases to be used for charitable purposes. Relief can also be afforded against any unoccupied property rates, providing that the ratepayer is a charity and it appears that when next in use, the property will be wholly or mainly used for charity purposes.
Charity shops are deemed to being wholly or mainly used for charitable purposes if it is wholly or mainly used for the sale of goods donated to a charity and the proceeds of the sale of the goods are applied for the purposes of the charity.
Discretionary rate relief
Organisations which are not charities cannot qualify for mandatory rate relief. However, they may apply for discretionary rate relief, providing they are not established for profit and the property is used either for charitable purposes or other purposes which are for the general wellbeing of the community (i.e. sports, social, religious, educational). This relief is awarded at the discretion of the council and in some circumstances can be up to 100% of the rates payable.
Charities and organisations that qualify for 80% mandatory relief will be eligible to apply, in accordance with the policy and guidance notes below, for discretionary relief up to the remaining 20% of the rates payable.
Any charity or organisation which is awarded discretionary rate relief will be invited to reapply each year and their application will be considered each year together with a set of the latest audited accounts and relief may be continued at the same rate, increased, decreased or removed completely.
Discretionary relief can be afforded against unoccupied property rates providing the conditions are met.