Non-Domestic Rates - Discretionary Relief

There is provision in rating legislation for local authorities to award up to 100% discretionary rates relief to charities and non-profit making organisations.  Some examples of those who may qualify for discretionary relief are:

• an OSCR registered charity, which occupies a property in furtherance of the objectives of the charity
• a public hall committee, whose property is open at all times and is freely enjoyed by all sections of the Community
• a club, society or other organisation which is not established or conducted for profit, membership of which is open to all members of the community

Entitlement to discretionary rates relief is determined by reference to Moray Council’s local policy on dealing with applications for awards of this relief (a copy of which may be downloaded by clicking this link). This policy states that applications form OSCR-registered local charities will be approved by officers of the Council, unless the charity falls within the following classes of ratepayer which are excluded from receiving an award of discretionary rates relief:

• charity shops
• national or regional organizations, unless for premises used to directly deliver their services to charities
• free standing office accommodation used by national or regional charities and
• all Early Learning and Childcare providers.

In addition to these specific exclusions, the local policy places the following conditions on any local charity that applies for any award of discretionary rates relief. It will only receive an award of relief if:

• it has unrestricted reserves of less than £100,000
• it has an annual income of less than £300,000 and
• there is no other relief available to the charity for its property.

In determining whether a not-for-profit organisation may qualify for an award of discretionary relief, the local policy requires that officers make reference to the Charity Test that OSCR applies as an objective and independent measure of community benefit.  To pass the Charity Test, an organisation must provide public benefit in Scotland or elsewhere.  These tests as stated in the Charity and Trustees Investment (Scotland) Act 2005 are:

(a) the prevention or relief of poverty
(b) the advancement of education
(c) the advancement of religion
(d) the advancement of health
(e) the saving of lives
(f) the advancement of citizenship or community development
(g) the advancement of the arts, heritage, culture or science
(h) the advancement of public participation in sport
(i) the provision of recreational facilities, or the organisation of recreational activities, with the object of improving the conditions of life for the persons for whom the facilities or activities are primarily intended
(j) the advancement of human rights, conflict resolution or reconciliation
(k) the promotion of religious or racial harmony
(l) the promotion of equality and diversity
(m) the advancement of environmental protection or improvement
(n) the relief of those in need by reason of age, ill-health, disability, financial hardship or other disadvantage
(o) the advancement of animal welfare
(p) any other purpose that may reasonably be regarded as analogous to any of the preceding purposes

To qualify for an award of discretionary rates relief a not-for profit organisation must also satisfy the public benefit test stated in the 2005 Act.
The local authority’s policy is that applications for an award of discretionary rates relief from organisations which are not OSCR registered charities will only be approved if

• the applicant-organisation satisfies one of the purposes defined in the Charity Test and
• the applicant-organisation delivers a public benefit

If you believe that your organisation is entitled to an award of discretionary rates relief, you must complete an application form and submit the necessary supporting evidence. You can download an application form by clicking here.

If your organisation qualifies for discretionary relief, an award of up to 100% of the amount of Non-Domestic Rates payable may be made. In the case of an OSCR registered charity, which has already qualified for an award of 80% mandatory relief, the reduction will be up to the amount of Non-Domestic Rates which remains payable.

For further information contact us, or download the Discretionary Relief (PDF) application form.