Richard Clayton QC of Kings Chambers is currently instructed by Kingston LBC to recover £600,000 of business rates from the charity Emergency Aid.
Since 2008, unoccupied property was required to pay rates at 100 per cent. The incentive to avoid paying business rates has encouraged many property owners to let their property to charities. The key to avoiding rates is that the charity must prove the property ‘is wholly or mainly used for charitable purposes’.
The courts are now cracking down on these arrangements. Following two recent cases, Kenya Aid and Public Safety Charitable Trust, the court takes a broad view and looks at the extent or amount of the actual use made of the property. These arrangements are now extremely vulnerable.