Are you paying too much?

Business rates now form a major part of many clubs' outgoings, and any possibility of reducing these must be worth investigating. Two specific ways of reducing this burden are open to you; a valuation appeal or Rate Relief from your local authority.

Valuation Appeals

Your Club's rates bills are based on assessments produced by the Valuation Office Agency (Inland Revenue). These values are are reviewed on a five-yearly basis, and the current rating list came into effect in April 2000.

Many clubs may be substantially overvalued for rates, as valuation officers often equate them with commercial premises without paying enough attention to the Valuation Office's own Guidelines On Sports Grounds And Recreational Premises (link).

For many years sports clubs of all kinds have been advised on rating matters by Lambert Smith Hampton. The firm is well experienced in dealing with all types of property and more specifically acts for numerous sailing, golf and cricket clubs nationwide. With their expertise and knowledge of current law and valuation principles, they can investigate all possibilities of minimising your liabilities.

The Rateable Value of property is a reflection of its rental value at a specific date. Historically, the ability of an occupier to pay for rates has always formed part of the rating hypothesis. However, this factor has recently become more relevant following a number of cases that were taken to Valuation Tribunal by surveyors acting for voluntary sports clubs.

The decisions of the Tribunals have forced the Valuation Office to consider an alternative method of assessment which takes into account the club's financial situation. Therefore the examination of the club's accounts has become an important part of the valuation process, and can be useful ammunition in negotiations with the Valuation Officer.

If you suspect that your club could be over-valued for rates, contact Chris Biddle, Lambert Smith Hampton (link) who will be pleased to carry out a preliminary assessment free of charge and in approriate cases act for clubs on a no-win no-fee basis.

Local Authority Rate Relief

Section 47 of the Local Government Finance Act 1988 permits local authorities to grant up to 100% rate relief to non-profit making bodies in their area.

In England and Wales authorities are re-imbursed 75% of the cost of rate relief from central funds, while in Scotland and Northern Ireland, 100% is re-imbursed. So, even in England and Wales, authorities have little excuse for charging full rates in deserving cases.

Each authority has a differnent policy on rate relief, and publishes its own guidance notes for clubs seeking rate relief. The criteria taken into account include:-

• Training and education for members
• Schemes to encourage young, disabled, or retired people, or other disadvanted groups
• Clubs built by self-help or grant aid
• Running a bar which is mainly limited to members only should not disqualify a club
• Facilities which reduce the need for the council to provide such facilities
• Active involvement in the local development of national governing body objectives
• Are most members from the authority area? If not, is there reciprocity with another sport in a neighbouring area?

To provide a measure of consistency between different local authorities, the Government issues a practice note to all local authorities to help them treat their local clubs fairly and equally. (click below).

Click here for DETR Guidance Note on Rate Relief

You should also note that, following the Local Government Act 2003, clubs that are registered with the Inland Revenue Sports Club Unit as CASCs (Community Amateur Sports Clubs) will be automatically entitled to 80% rate relief; the remaining 20% will still be available in appropriate cases at the discretion of the local authority. This mandatory rate relief was agreed by the Government after many years of lobbying by the governing bodies of sport (including the RYA), co-ordinated by the Central Council of Physical Recreation.

If you require further assistance please do not hesitate to contact the Legal Department Tel: 0845 3450373 Email: legal@rya.org.uk.