4.1 Mandatory Relief for Charities etc.
4.1.1 On receipt of an application for rate relief, billing authorities should first consider whether the institution or organisation is eligible for mandatory relief.
4.1.2 To qualify for mandatory relief, the property must be used wholly or mainly for charitable purposes and the institution or organisation must be established for charitable purposes only or be occupied by any persons administering a trust established for charitable purpose only. Registration under the Charities Act 1993 as amended, is conclusive evidence of charitable status. Bodies which, under the 1993 Act, are excepted from registration or are exempt charities are also eligible for mandatory relief.
4.1.3 Mandatory relief for charities and similar organisations at 80% of rates payable is provided for in sections 43(5) and 45(5) of the 1988 Act. This relief is fully centrally funded, in that billing authorities are not required to pay the amount foregone into the national rate pool.
4.1.4 Although charitable organisations are eligible for 80% mandatory relief, this relief can be topped up to 100% at the discretion of the billing authority under section 47. This discretionary top-up is 25% centrally funded, as billing authorities are required to pay 75% of any such top-up into the national rate pool (See paragraph 3 of Schedule 1 to the Non-Domestic Rating Contribution (England) Regulations 2000). If an authority wishes to increase the relief to charities above the mandatory level, for the purposes of calculating the chargeable amount, sections 43(5) and 45(5) are disapplied and the chargeable amount is determined by, or found in accordance with, rules determined by the authority.
4.1.5 Mandatory rate relief under section 43 of the 1988 Act for the rural rate relief schemes is intended to be provided in separate guidance.
4.2 Discretionary Relief
4.2.1 Where the property does not qualify for mandatory relief, authorities will still be able to consider the award of discretionary rate relief under section 47 of the LGFA 1988. Authorities have a discretion to grant relief of up to 100% to certain non-profit making bodies. The range of bodies eligible for discretionary rate relief is wide and not all of the suggested criteria will be applicable in each case. To be eligible for consideration, the ratepayer must be a non-profit making body and the hereditament used for charitable, philanthropic or religious purposes, or concerned with education, social welfare, science, literature or the fine arts, or used wholly or mainly for recreation by a not-for-profit club or society.
4.2.2 Authorities should consider carefully on its merits any bona fide case for relief, taking into account the contribution that the organisation makes to the local area. But where the case is properly a case of the ratepayer suffering hardship it should be considered under section 49 not section 47. 75% of the cost of this discretionary relief is met centrally, with the billing authority, and through them, the council taxpayer meeting the remaining 25%, which the authority must contribute to the national rate pool (See paragraph 3 of Schedule 1 to the Non-Domestic Rating Contribution (England) Regulations 2000).
4.2.3 Discretionary rate relief under section 47 of the 1988 Act for the rural rate relief schemes is intended to be provided in separate guidance.
4.3 Hardship Relief
4.3.1 Billing authorities also have discretion under section 49(1) of the LGFA 1988 to grant relief of up to 100% to any ratepayers who would suffer hardship if they were not granted relief, and it is in the best interest of their council tax payers. Under this provision, billing authorities may reduce or remit the payment of rates due under sections 43 and 45 of the LGFA 1988, for occupied or unoccupied properties. 75% of the cost of funding this relief is met centrally, with the billing authority meeting the remaining 25% (See paragraph 3 of Schedule 1 to the Non-Domestic Rating Contribution (England) Regulations 2000).
4.4.1 Decisions on discretionary rate relief in all cases are a matter for the billing authority concerned. However, rate relief applications for a number of types of bodies often give rise to queries to the Department both from authorities having to make the determination, and from organisations querying entitlements to relief, or the decisions made in their own cases. Particular issues have been raised in relation to:
- rate relief for non-profit making sports clubs;
- charitable organisations and shops;
- hardship relief; and
- empty and partly occupied property relief.
The following sections give advice on the sorts of issues billing authorities might take into account in considering their decisions on applications for relief.
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Published 5 December 2002
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