The Budget and charity retail

The Autumn Budget for 2024 was presented to Parliament on Wednesday 30 October. Here is a short round up of areas that effect charity shops and how you can help with data gathering.

National Insurance and NLW

The Charity Finance Group (CFG) are conducting a survey to understand the impact on charitable organisations of the recent government announcements on increases to the National Living Wage and Employer National Insurance contributions. Your insights will help CFG advocate for the sector and ensure that the government understands the scale and impact of this new financial pressure. The survey will close at midnight, next Friday 15 November. Do please complete the survey here: https://www.surveymonkey.com/r/QGH6T3W

And we will be running a survey on this specifically for charity retail week commencing 11 November to support CRA’s lobbying activity on this subject.

Business rates

The budget contained some broadly positive news on business rates, as the Government has listened to calls from us and many others to put the current temporary rate reductions for retailers on a permanent footing in the future. This will be particularly beneficial for larger retailers as it means state aid rules should not apply, meaning no cash cap on the relief.

As of the next financial year, the temporary Retail Relief in England will remain and will be set at 40% (down from 75%) with a cash cap of £110,000 per business. But from April 2026, the Government has signalled an intention to permanently reduce business rates in England for retail properties with a Rateable Value of below £500,000. This will be done by setting a separate multiplier for retail, hospitality and leisure premises and the reductions will be weighted in favour of property with rateable values below £51,000. The Government has not yet indicated the scale of the reduction, and it is possible that the 2026 revaluation will mean that bills don’t fall in some areas and for some retail properties. But the overall impact of this move should be a reduced business rates burden on high streets in general and a reduced rates burden for many charity shops. The benefit of the lower retail multiplier would be applied before the application of Charitable Rate Relief.

Check your business rate bills for the current tax year!

In England and Wales, charity shops are currently eligible for two separate business rate reliefs: Charitable Rate Relief and Retail, Hospitality and Leisure Relief. Charitable Relief is applied first and then Retail Relief is applied to the remaining amount. The maximum amount that can be awarded in Retail Relief to an individual charity is £110,000 as noted above.

It has been discovered that Local Authorities are not automatically awarding all charity shops with Retail, Hospitality and Leisure Relief. So, we would encourage charity retailers to check that this Retail Relief has been applied to your business rate bills.

More charities will be eligible for Retail Relief than in the previous three years as the Covid-19 Business Grants no longer apply towards subsidy control/state aid limits as they now fall outside the three-year window used to assess maximum amount of subsidy that can be granted.

More information on Retail Relief is available when you log in here and you can contact our Head of Public Affairs, Jonathan Mail for more information at jonathan@charityretail.org.uk.

08/11/2024 10:03