The exchequer secretary to the treasury has told sector bodies that the devolution of business rates does not relate to the mandatory element of charity business relief, however they say that this "does not definitively settle the issue".
Six sector bodies, including NCVO and Charity Finance Group wrote to Chancellor George Osborne back in October, following his announcement at the Conservative Party Conference that the control over business rates would move to local government.
The joint letter asked for clarification over business rate relief, which is the largest charitable tax relief, and reassurances that the £1.7bn it saves for the sector won’t be affected.
In the letter, Hinds (pictured) said: “The announcement only related to the headline rate of business rates and did not make any changes to the existing system of reliefs and exemptions.”
He went on to say that officials will be carefully considering the views of all charities and sector organisations as part of its review on business rates, which will be completed by the end of the year.
He added: “Please be assured that the government continues to acknowledge the important role that charities play in society and is committed to supporting the sector.”
The NCVO and CFG have said that the letter from Hinds, which was also sent to Locality, the Charity Retail Association, Institute of Fundraising and CAN, “does not definitively settle the issue”.
Michael Birtwistle, senior policy officer of funding and finance at NCVO, said: “Without mandatory rate relief, many charities of all sizes would find their costs increasing substantially. The government has acknowledged the value this relief represents for the sector and we will continue our dialogue with them to ensure it is protected.”
Andrew O’Brien, head of policy and public affairs at the CFG, said: “We would be deeply concerned about any changes affecting mandatory rate relief. Cuts or loss of business rate relief would be a big blow to tens of thousands of charities, particularly small and medium sized organisations, and would directly impact the frontline.
“We continue to engage with the government but would urge ministers to meet with charity sector representatives personally to understand the potential impact of any changes before the Spending Review.”
The Charity Tax Group also wrote a letter to Hinds seeking clarification over business rate relief following the Chancellor’s announcement last month.
He clarified that the plans do not refer to charitable or other business rate reliefs, however he said the “government is still considering representations regarding the wider business rates system, including reliefs, and that we can expect further detail to be set out in the Autumn Statement”.
