As local authorities embark upon further spending cuts, we are also facing a period where business rates are to be reviewed for the first time in nearly a decade, and could see significant rises. This clearly has a big impact on commercial businesses, so for grassroots organisations with limited funds – perhaps delivering sporting activities from their own venue – it could be the final straw.
Over the past year I have had the pleasure of working with many boxing clubs through our Box On programme. Speaking to participants, some common themes emerged:
• There’s a lack of consistency – some clubs manage to secure business rate relief, while others pay as much in rates as they do in rent!
• Circumstances can and do change, leaving clubs vulnerable to increases in business rates.
• There’s no way of avoiding it! We have examples where clubs have been invoiced for arrears in their business rates, perhaps because they were unsure they had to be paid or simply had been missed.
• Whenever your group moves into a new venue, it is imperative that prior to signing the agreements, to review the viability of managing the premises; this means also reviewing the business rate liability if it exists.
• If in doubt, enquire directly with the local authority to determine the rateable value.
• There could be scope to negotiate rates based upon the not-for-profit nature of the organisation!
How to gain business rate-relief
If you plan ahead, there are opportunities to gain relief from local authorities. This is by either registering as a Community Amateur Sports Club (CASC) or registering as a charity. Registering as a CASC is deemed as an easier route, as it was specifically designed for sport organisations who may struggle with the registration process and the obligations of the Charity Commission. Essentially, it is a registration with the HMRC and the club will then be able to apply for relief of up to 80%. Sometime it’s even possible for organisations to secure 100% relief. The club will also be able to register for Gift Aid, which claims back the tax already paid on donations.
The traditional route was to establish a charity, although there are more reporting requirements and obligations to the Charity Commission. The charity is the most recognised form and will again enable the organisation to apply for 80% and possibly, 100% relief.
Both of the above are not without their complexities and should be planned to ensure they match the strategy and are a suitable route for the organisation. A CASC may not be ideal, as the organisation will be unable to evolve. Once registered it will be difficult to deregister (or even not possible). Further to this, taking on a venue is an additional liability and the organisation may wish to consider their structure to ensure that they are protected. The registration as a CASC or the Charity Commission does not provide this protection.
Business rates will be a contentious issue for years to come and any increases will inevitably impact upon our already desolated town centres. I feel that there should be greater recognition of the vital services which community groups across the UK deliver, and more leniency applied to their approach to rates.
If you are a Sported member and your organisation is facing issues such as those discussed we can offer support to undertake robust business planning when seeking to secure new premises, investigate options to mitigate against risk or even identify suitable forms of funding for your venue.
For more information, please contact your local regional manager or login to Your Sported Network to request support.