Consultation proposes that charities pay rates
In November 2013, the then Finance Minister Simon Hamilton announced to the Assembly his intention to undertake a full review of the non-domestic taxation system. On 12 May 2015,Minister Foster announced to the Assembly her intention to proceed with this review. The review will consider whether the current system is fit for purpose and whether there are alternative ways of raising revenue from those who do business in Norrthern Ireland.
An Innovation Lab was held in early June, which NICVA attended, and was also attended by representatives from a range of interest groups, business organisations, local government, academia and professional bodies. More information on the Innovation Lab is available here. The Innovation Lab helped shape the terms of reference for the review. The consultation paper primarily focuses on the current system of non-domestic taxation but will also welcome views on any alternative system that could be used to either replace or supplement part of the revenue currently raised from the business sector through the rating system.
The consultation paper considers the income composition of registered charities in Northern Ireland with 80% of registered charities earning less than £200k a year which accounts for less than 20% of the sector's income. Charities with an income of more than £200k make up less than 20% of the sector but account for more than 80% of the total income.
The paper states that 'given the evidence it could be argued that it is both appropriate and affordable for some of the organisations currently benefiting from a 100% exemption to make some contribution towards their rates. This is especially pertinent considering that the charitable exemption elsewhere within the UK is 80% (although DFP is of the view that if changes are to be made to the 100% non-domestic exemption then changes should only apply to those sectors that compete directly with commercial undertakings).'
NICVA's basic position on this issue remains unchanged. We believe that all charities should continue to be exempt from paying rates because the public benefit derived from the work of charities far outweighs any potential revenue. We have requested more information from DFP on a number of the issues raised in the consultation and we will be making a robust response in defence of our position.
If you're concerned about how much your organisation may be liable to pay if changes are made, use our step by step guide to working out your rates bill.
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