Business rate write off
A request to write off the business rate debts for two charitable organisations
that have gone into liquidation will be put to a Cabinet meeting on Tuesday (13
Between them, the two companies Public Safety Charitable Trust and the Life
Foundation Trust owe nearly £400,000 to Flintshire County Council in business
rates and any debt write off exceeding £25,000 must be approved by Cabinet.
The two companies involved had leased properties all over England and Wales in
a business rates avoidance scheme. As a registered charity, a company only pays
20% of the full business rates if they use the property wholly and mainly for
charitable purposes and once occupied landlords are no longer responsible for
paying business rates on empty properties.
A Council investigation showed that the two companies were not putting the
premises leased to proper use and it was decided to take legal action. A total
of 121 properties had been leased between the companies in Flintshire.
In taking this Court action Flintshire was one of a small number of councils in
the UK who were instrumental in securing High Court rulings in favour of local
authorities, who now have the right to claim back the money owed.
Councillor Aaron Shotton, Leader of the Council said:
“This was a national tax avoidance scheme and Flintshire was one of the lead
councils that took court action to try and recover the business rates owed. The
companies were made insolvent before we could enforce the rulings of the court
and now the chances of recovering the money on behalf of Welsh Government are
“When a company claims the Charitable Rate Relief the properties have to be
wholly used for charitable purposes, due to the action taken by Flintshire and
other councils, we have been at the forefront of stamping out this tax
avoidance scheme and money owed in future situations can now be claimed by
local authorities. Rate avoidance schemes are now presenting wider issues
across the UK and although the Council hasn’t lost out as rates are handed to
Welsh Government, the loss is significant to the public purse.
Public Safety Charitable Trust owes £336, 923.
The Life Foundation Trust owes £60,732.