Charity shops are being used to avoid business rates in Northern Ireland and the government there will look at charitable rate exemptions in more detail, according to a minister conducting a review of rate relief.
Arlene Foster, minister for the department of enterprise, trade and investment in Northern Ireland, was speaking during questions on finance in the Northern Ireland Assembly.
The Northern Irish administration is consulting on all aspects of rate relief at present, including charging more tax on empty properties and whether charities should continue to receive the same level of rate relief.
Foster was asked by Máirtín Ó Muilleoir, a Sinn Féin member, whether charity shops were a “loophole” being used for rates avoidance by landlords. She said in response that she was concerned that if rates on empty properties were increased, more landlords would let to charities who rarely used the premises, as a way of avoiding tax.
"It is fair to say that the subject has already come up in the consultation,” she said. “A charity shop might be open for a limited number of hours one day a week. By doing that, the landlord has avoided rates liability. We will have to look at that in more detail. Many town-centre operators have raised with me that they feel very aggrieved at the fact that people can avoid rates by using charity shop exemptions.”
Northern Irish charity infrastructure body Nicva is working with the Charity Retail Association (CRA) at present to campaign to ensure charitable rate relief remains intact in Northern Ireland.
Seamus McAleavey, chief executive of Nicva, said that he was surprised by Foster’s comments. He said he had asked the administration for evidence to support concerns about rates avoidance involving charities, but had not received any.
Robin Osterly, chief executive of the CRA, said he was concerned about suggestions that charities could be involved in rates avoidance.
“That seems to have gone away in England but is still a concern in Northern Ireland,” he said.
He said his organisation would “be fighting tooth and nail” to ensure that there was no threat to charity rate relief in Northern Ireland.
Rate relief in Northern Ireland is currently worth £87m a year to the charity sector. There are around 850 charity shops who between them receive several million of that relief.
