ECDC Business Rates Relief for Charities

Higher Business Rates for Not for Profit Organisations within East Cambs District.
Since March 2012, East Cambridgeshire District Council (ECDC) has been reviewing it’s policy on granting Discretionary Relief on business rates to give assistance to charitable and not for profit organisations that may have difficulty in paying their rates and are of benefit to the local community, such as village halls. ECDC decided that the previous policy of granting 20% discretionary relief, either to top up the 80% mandatory relief, or to give discretionary relief alone, was too generous to certain organisations who did not really need this assistance:

• ECDC paper on Discretionary Rate Relief Service Review Improvement Plan

As a result of this review, it was decided that from the 13-14 financial year onwards, discretionary rates relief (capped at £2,000 pa) would only be granted if the following criteria applied:

1. No restrictive membership practices.
2. Evidence of support for disadvantaged groups where the applicant is a community organisation.
3. Facilities/services must demonstrate benefit to local people/redistribution of majority funding to local communities.
4. Bar provision in facilities should be an ancillary service (less than 50% of income).
5. Unrestricted reserves should not exceed £100,000.
6. Average Annual surpluses (based on the two most recent sets of accounts) should not exceed £26,000.
7. Various other eligibility criteria must also apply for the application to be eligible.

Local not for profit organisations will now need to review their constitution, surplus retention and a accounting policies to make sure they minimise their future exposure to this local tax.