Unoccupied premises: don’t lose your rates relief

NICVA has recently received a number of queries from members who have been faced with rates bills for vacant properties following the end of tenancies. While many organisations registered as charities for tax purposes with HMRC will typically enjoy full or partial charitable rates exemptions, this is only in so far as the property is occupied and used wholly or mainly for charitable purposes.  

Given the difficult economic climate, charities may find themselves with empty lets for the first time and may not realise that there are no exemptions for vacant properties, after a period of three months of non-occupation. Where charities own vacant property which is neither occupied nor used wholly or mainly for charitable purposes, this property will be rateable and a charity will be unable to avail of exemptions for that particular property. Please be aware that the use of properties solely for storage purposes will not meet the test for occupation and use by charities. It is important in these instances to contact local Land and Property Services (LPS) and advise them of the situation and to budget accordingly for any applicable rates bill that organisations may receive. 

 Where an organisation is dealing with an issue of vacant or unoccupied property it should seek to:

• consider the potential liability of the charity to pay outstanding rates;
• contact the local LPS rating office in relation to any applicable rating holiday, premises relief or exemption period;

• look to extend tenancy agreements with existing tenants or ensure that new tenants are acquired for soon to end tenancies;

• where appropriate, take suitable professional advice;
• ensure that appropriate written records are kept.

If your charity is now faced with vacant units or with tenancy agreements which are now running down and will not be renewed, you should contact LPS on 0300 200 7801 or http://www.dfpni.gov.uk/lps/

Charity trustees should ensure that the risk of properties remaining unoccupied for long periods of time is minimised and may need to review their operational plans and associated budgets. For further information please contact the Governance and Charity Advice Team at NICVA on 028 9087 7777.