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Crime charity cannot appeal rate relief ruling, says lawyer

Crime charity cannot appeal rate relief ruling, says lawyer
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Crime charity cannot appeal rate relief ruling, says lawyer

Finance | Tania Mason | 23 May 2013

A lawyer for one of the councils involved in the Public Safety Charitable Trust rate relief case has insisted the charity has no right of appeal in the case and so cannot challenge the High Court ruling.

Recently the High Court upheld an appeal by three local authorities against claims for business rate relief by the PSCT.  The charity had been leasing more than 1,500 empty commercial properties across the country, installing wifi transmitters in them and allowing Crimestoppers to broadcast crime prevention messages via Bluetooth to members of the public.

It paid a peppercorn rent and thus allowed its landlords to avoid paying empty business rates on the properties because they were being used for charitable purposes. In some cases the landlords also paid a “reverse premium” to the charity.

But the High Court ruled that the charitable use of the buildings was not enough to justify the rate relief.  Mr Justice Sales upheld two of the local authority challenges and found in favour of the third, concerning Cheshire West and Chester Council, but sent that case back to the local Magistrate for the magistrate to consider other issues relating to the main premises.

Charities lawyer Moira Protani said after the ruling that the judgment set a “dangerous precedent” by allowing local authorities to overrule decisions of trustee boards as to how to run their charities, and urged the PSCT to appeal. 

Mark Ferguson, the charity’s CEO, said he was not prepared to accept the decision and would be taking further legal advice about how to challenge it in the courts.

No right of appeal

But Virginia Lloyd, a lawyer at South Cambridgeshire District Council, told civilsociety.co.uk that there is no right of appeal.  She said: “The PSCT have no option but to accept the High Court judgment and have no right of appeal.  They are demonstrating that they accept the decision by paying the liability orders which were the subject of the High Court appeal.

“The referral back to the Magistrates Court only concerns Chester and will not be relevant to or binding on any other council. It is purely in relation to Chester’s case and given the High Court judgment it is very likely that the Council's decision to charge business rates for the main premises would be vindicated.”

Moira Protani said in response: “Two lawyers will never agree on points of law.”

Councils will demand 'hundreds of millions'

This week, the Local Government Chronicle published a story stating that councils around the country are preparing to demand “hundreds of millions of pounds” from the charity in the wake of the High Court judgment.

In response, Sir Stephen Bubb, CEO of Acevo, said: “I am concerned that this judgment may have wider implications for the sector. Charitable rate relief has enabled small charities to retain a much-needed presence on high streets and in communities. Any attempt by councils to claw back rate relief is more likely to send local charities into bankruptcy than to produce any significant sums of money for councils.

“In this case it seems unlikely that the authorities involved will recoup much money - but the charity involved will undoubtedly be forced to close. I urge the councils involved to ensure they are not jeopardising the future of a valued charity for the sake of a few shekels.”
 

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