This week saw the Conservative Party Conference take place in Manchester. During his speech, George Osborne announced that local councils will keep all proceeds raised from business rates (and the local government grant back to councils will be phased out), calling it the \u201cbiggest transfer of power to our local government in living memory\u201d.<\/p>\n
Now politicians usually make the news with what they say \u2013 but when reading about the plan for business rates proceeds, I was struck by something that the Chancellor didn\u2019t say.<\/p>\n
Charities currently enjoy 80% mandatory relief on business rates – granted by central government. Relief on the remaining 20% is granted at the discretion of the local council. George Osborne made no mention in his speech as to whether the 80% mandatory relief will remain. This could be taken to mean that the relief is staying \u2013 no news being good news.<\/p>\n
But is this good news? If councils are able to retain all proceeds from business rates, then they may be less incentivised to grant the additional 20% discretionary relief. This could potentially give rise to additional liabilities on charities and put additional strains on their resources in having to fund rates previously waived.<\/p>\n
If councils are to enjoy the benefits of the proceeds from business rates, then they are also effectively suffering the cost of providing the relief. Since 2013 councils have been able to keep 50% of the proceeds from business rates and there are tales of councils seemingly becoming more interested in reviewing property tenants and whether a charity occupies the premises or a trading subsidiary. This may suggest that they are looking to maximise rates proceeds, and minimise the amount of relief given.<\/p>\n
At this stage, perhaps it\u2019s not so much \u2018\u2019no news is good news\u2019\u2019 as it is \u2018\u2018no news is not bad news\u2019\u2019. However, with rates relief worth an estimated \u00a31.69billion to charities, this is a relief to the sector that is worth fighting for, and that the sector will fight for. Something to keep an eye on\u2026.<\/p>\n","protected":false},"excerpt":{"rendered":"
This week saw the Conservative Party Conference take place in Manchester. During his speech, George Osborne announced that local councils will keep all proceeds raised from business rates (and the local government grant back to councils will be phased out), calling it the \u201cbiggest transfer of power to our local government in living memory\u201d. Now[…] <\/p>\n