Charity rate relief loss concern grows, as a Court finds against a charity

Another court decision finding against a charity on the validity of a charity’s rates relief claims is adding to the sector’s growing concern about the apparent encroachment on this valuable and important tax relief. Sheffield City Council took the Kenya Aid Programme (the “KAP”) to court, challenging KAP’s claims for mandatory rate relief and contending that KAP’s use of warehouses for storing furniture before shipping it to Africa did not constitute use that was “wholly or mainly” for charitable purposes, because less than half of the available space was used. Sheffield Magistrates’ Court found in favour of the local authority’s challenge and ordered KAP to pay £3.27m in rates dating back to 2010, even though KAP has an annual income, according to its latest filed accounts, is just over £80,000. KAP has indicated that it will appeal against the judgment but did not comment on what its grounds for an appeal were likely to be.

IBB Solicitors’ specialist Charity Law Experts have a wealth of experience in delivering practical commercial advice to charities and not for profit organisations and those who work with them. For advice, contact a member of the team, call us on 01895 207809 or email charities@ibblaw.co.uk