Impact of business rates relief on charities

Categories: Community Engagement.

As previously reported, the Welsh Government promised to consult on recommendations made by Professor Brian Morgan to reduce rate relief for charity shops, cap their numbers and restrict the premises they can occupy.

The independent review of business rates, led by Professor Morgan and published in June (2012), examined whether the business rates regime could be used to encourage economic development and growth in Wales.

The Charity Retail Association, WCVA and Hospices Cymru have warned that an increase in charity shop rates could seriously impact hospices and charities across Wales. In a joint statement they said:

‘The profit [from charity shops] goes directly to charity to support vital services to communities in Wales, for example the £2 million profit generated by hospice shops in Wales contributed directly to the funding of local hospice services for more than 5,000 seriously ill people, their friends, carers and family across Wales.

‘Any reduction to the vital rate relief which 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%. 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.’

Call for evidence

Views are invited on:

  • the levels of relief that are currently available to charities across all the types of non-domestic premises they occupy
  • whether the relief available to charities should be changed and the impact that this might have based on the available evidence
  • whether relief, or further relief, should be offered to social enterprises and credit unions as an incentive to support their work
  • any other evidence or relevant examples.

Professor Morgan, who will also lead this consultation, 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. We also intend to provide a further opportunity for consultation and bring charities and business together to discuss these issues before submitting a response to the Minister and details of that event will be published in due course.”

Responses are invited by email or by post. The deadline for responses is 19 December 2012.

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