Sheffield Magistrates’ Court has ordered Kenya Aid Programme to pay £3.27m in backdated rates to Sheffield City Council after ruling that the charity’s use of two buildings did not qualify for mandatory rates relief.
The decision handed down by magistrates on Wednesday is the latest twist in a long-running dispute between the charity and the council over business rates relief on two warehouses the charity used for storing second-hand office and school furniture before shipping to Kenya.
Because the warehouses tended to be only half-full of furniture at most, the Council contested both the level of the use of the premises and that this charitable use was the sole or main use of the premises – as the law governing rates relief decrees it must be.
The Council also argued that aside from the charitable storage of furniture, the premises was being used for a number of different uses, including fundraising through the solicitation of donations from landlords, which would not attract charitable relief.
Wednesday’s hearing was the re-hearing of the matter before District Judge Browne. A previous hearing had found in the council’s favour and issued a liability order for 100 per cent of the rates dating back to 2010, but Kenya Aid Programme appealed.
District Judge Browne found that the level of use of the premises was less than 50 per cent, not enough to trigger charitable relief and that Kenya Aid Programme was not making extensive use of the premises based upon the evidence received from both parties.
On this basis he granted liability orders in favour of the Council totalling £3.27m for the years 2010-2014.
In the year to June 2011, Kenya Aid Programme had income of just over £80,000. It is 122 days late filing its 2012 accounts with the Charity Commission but an abbreviated balance sheet filed with Companies House show that it has reserves of just over £18,000.
The Council told civilsociety.co.uk that it had been advised not to comment on the outcome until after the 28-day appeal window had expired. A spokesman said Kenya Aid Programme had a history of appealing against rulings against it and so the Council expected it would appeal this one too.
Kenya Aid’s Programme’s CEO Maurice Smith was unavailable for comment.
