Business rates is charged on most non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. Charities and not-for-profit organisations can get up to a 100% reduction in their business rates. The relief is also available to Community Amateur Sports Clubs (CASCs).
The reduction is made up of a mandatory 80% relief on business rates from central government. In addition, local authorities can offer a further top-up of up to the remaining 20% as a discretionary relief. Figures published by the National Council for Voluntary Organisations (NCVO) found that in the year to March 2014, local authorities only provided an average of 12.5% of the relief they are able to provide.
Some recent changes announced as part of the Budget will help some smaller charities that are still paying business rates. From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates, a doubling of the current limit of £6,000.
There will be a tapered rate of relief on properties with a rateable value up to £15,000 and the threshold for the higher rate will be increased from £18,000 to £51,000. From April 2020, taxes for all businesses paying rates will be cut through a switch in the annual indexation of business rates from RPI to CPI.
HMRC can also grant relief of up to 100% to organisations that are not a charity, but that have been set up for religious, social welfare, artistic, educational or recreational purposes on a non-profit basis.