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What is this week's blog about?
In this week’s blog, we take a look at charitable business rates relief and the recent London Borough (LB) of Merton v Nuffield Health [2023] UKSC 18 case.
This is essential reading for RICS APC candidates following the Local Taxation/Assessment competency, as well as qualified surveyors working on business rates instructions.
What is charitable business rates relief?
There are various forms of business rates relief available, including small business, rural, retail hospitality & leisure, empty property, transitional, freeports, enterprise zones and charitable.
Charitable relief is available where a property is ‘wholly or mainly used’ by a charity, charity trustees or a Community Amateur Sports Club (CASC). This is set out by Section 43 (6) of the Local Government Finance Act 1988.
Proof of charitable status can be provided through the charity’s registration number or HMRC registration for a CASC.
Up to 80% relief is provided on the property’s business rates bill. This can be discretionally increased to 100% by the local authority.
If charitable relief is received, then other forms of relief such as small business relief cannot also be applied for.
What happened in the LB of Merton case?
The Supreme Court presided over this case, with a decision being reached in June 2023.
Essentially, Nuffield Health, a registered health charity, operated a gym at Merton Abbey. They also run various other gyms and centres across the UK.
The LB of Merton argued that because the cost of gym membership at Merton Abbey was expensive and not financially accessible to all, charitable relief should not be applied to the property.
However, the Supreme Court held that running a gym fulfilled the overall charitable objective of Nuffield Health, which was:
‘To advance, promote and maintain health and healthcare of all descriptions and to prevent, relieve and cure sickness and ill health of any kind, all for the public benefit’.
As a result, Nuffield Health were granted 80% mandatory rates relief at this property.
The precedent provides certainty for charities, property owners and local authorities on the application of charitable relief. Simply put, if a property is used by a charity to further it’s charitable objectives then charitable business rates relief will be applied. This is irrespective of whether the specific premises has a wider public benefit.
You can read the full Supreme Court judgement online.
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Stay tuned for our next blog post to help build a better you.
N.b. Nothing in this article constitutes legal, professional or financial advice.