Following the news of reform in the Scottish rating system earlier this month the Welsh government has followed suit with a consultation into charitable business rates reliefs for schools and hospitals in Wales.
There are approximately 120,000 non-domestic properties in Wales that contribute around £1billion in revenue each year, revenue that is distributed to fund local government and police services throughout the country.
Under the Local Government Finance Act 1988, a property is eligible for charitable relief if it is owned or occupied by a charity. On this basis, schools and hospitals may be eligible for charitable relief where they can prove that they have been established for a charitable purpose and this purpose is of benefit to the public.
Earliest this month we wrote about the Scottish rating review and how the removal of eligibility for charitable relief for independent schools could be a concern if rates become a financial burden for institutions that currently receive the mandatory relief.
As such, the Welsh Government is calling for views on whether or not the following types of bodies should be eligible for charitable relief:
- independent & private schools
- maintained & public sector schools
- private hospitals
- public hospitals
Business Rates expert Graham Isle commented, “As with the announced Scottish Bill, we wait to see the true effect of these proposed changes. We’ve dealt with a number of clients that currently claim charitable relief for their schools and are aware that it may become difficult for them to financially survive without some form of relief.
“It will be interesting to see the responses the Welsh Government receive and whether England follows suit.”
The business rates 2021 revaluation is now just over a year away, get in touch with one of our rating surveyors to find out how we can help you mitigate your rates liability.