Business rates reform is back on the agenda in both Scotland and Northern Ireland

A consultation is currently underway in Northern Ireland into how the business rates system there could be improved. The consultation is open ended and as such there are no detailed proposals to respond to. Nonetheless, it seems likely that some respondents will use the consultation to again argue that the current business rates exemption for charity shops wholly selling donated goods is too generous. It is therefore important for us and charity retail more widely to demonstrate that the Northern Irish business rates exemption is great value for money. Our research conducted in 2016 found that removing the exemption and replacing with an 80% relied would:

• Reduce the funds raised by charity shops in Northern Ireland by around £500,000 a year
• Increase the landfill tax bill for local authorities by more than £294,000

To support our response to the latest consultation a new survey of Northern Irish charity retailers is underway. Last week I met with Government Officials leading the consultation to make the case that changes to the charity shop rates exemption would be counterproductive and cost more than it would raise. Our Chief Executive also chaired a meeting of Northern Irish charity retailers to discuss a joint approach.

In parallel, last Thursday the Scottish Parliament started debating the Non–Domestic Rates (Scotland) Bill which introduces changes to business rates in Scotland. The Bill does not alter the 80% mandatory business rates relief for charity shops.  The parliamentary debates around the Bill provide us with a valuable opportunity to make the case that the mandatory relief should be increased to 100%. To support this call we published new research showing that only 1 in 3 Scottish councils award an additional 20% discretionary rates relief to charity shops. Introducing a mandatory rate relief of 100% would remove a postcode lottery on business rates relief for charity shops. We have also been lobbying Members of the Scottish Parliament. Ahead of the debate our Chief Executive, Robin Osterley, commented:

“Our new investigation reveals the challenges faced by charity retailers in Scotland when it comes to support from local councils. Business rates reform is an opportunity to recognise the waste reduction activities of charity shops which ultimately, lowers carbon emissions.

“Each year around 33,000 tonnes of textiles are kept out of landfill as a result of charity retail in Scotland. On top of this, charity shops bring high street footfall, jobs, volunteering opportunities and wider societal benefits.

“The Scottish Government can use business rates reform to recognise the huge economic and environmental benefits of the sector. By awarding full rates relief universally to charity shops, they can thrive and help secure a more sustainable future for Scotland’s communities.”

Jonathan Mail
Head of Public Affairs
Charity Retail Association