Rates on Club Premises
Business rates can be a major expenditure for clubs. It therefore pays to explore any possible means of reducing this expenditure.
Are you paying too much?
The possibility of reducing business rates must be worth investigating. Three specific ways of reducing this burden are open to you; Becoming a registered Community Amateur Sports Club (CASC); Rate Relief from your local authority; or a Valuation Appeal.
CASC:
Following the inception of CASC pusuant to the Finance Act 2002, the Local Government Act 2003 provides that clubs registered with the Inland Revenue Sports Club Unit as CASC will be automatically entitled to 80% rate relief; the remaining 20% will still be available at the discretion of the local authority. Detailed information on the CASC Scheme can be found within the Constitution section of the website under 'See Also'.
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 theSport and Recreation Alliance.
Mandatory Rate relief is beneficial to local authorities due to the fact that the mandatory 80% rate relief is funded entirely by central government whereas there is a cost of 25% to local authorities when they award 100% discretionary rate relief.
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 different policy on rate relief, and publishes its own guidance notes for clubs seeking rate relief. The criteria taken into account includes:
- whether training and education is provided for members;
- schemes to encourage young, disabled, or retired people, or other disadvanted groups;
- clubs built by self-help or grant;
- 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 Guidance Note to all local authorities to help them treat their local clubs fairly and equally. The above link will you take you through to a downloadable version of the guidance on our website. It is worthwhile noting that the Government is in the process of updating the guidance and has stated that it intends to remove it from its website until such time as it has been amended.
Unfortunately, perhaps in part due to the tough economic climate, we are aware that more and more local authorities are withdrawing discretionary rate relief.
Valuation Appeals:
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 1st April 2010. New rateable values will become effective in England and Wales on 1st April 2015.
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.
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 became 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 is over-valued for rates it is definitely worthwhile seeking the assistance of a Property Consultant to help minimise your liability. Some Consultants may well be willing to carry out a preliminary assessment free of charge and in approriate cases act for clubs on a no-win no-fee basis. The table below contains a downloadable contact list for Property Advisors.
The Business Link website enables clubs to search for their rateable value and compare them with other clubs. Errors can be made when assessing an organisations rateable value so it is worth clubs checking how their bill is created. A link to the website is contained on the right hand side of this page in the 'Elsewhere on the Web' section.
Related Downloads
If you require further assistance please do not hesitate to contact the Legal Team
Tel:
0844 5569519 Email:
legal@rya.org.uk.