Business rates relief

Under Local Government Finance Act 1988 s.43(6), a property qualifies for 80% mandatory relief where:

• The ratepayer is a registered charity (or the trustees of a registered charity, where the charity is unincorporated)
• The property is used wholly or mainlyfor the charity's charitable purposes
• The use is not such that the property would otherwise be excluded

“Wholly or mainly” means more than 50% in practice. A village hall used 60% for charitable purposes and 40% commercially (or by hirers with no charitable purpose) still qualifies. A property used 30% charitable and 70% commercial does not.

CASCs (Community Amateur Sports Clubs)registered with HMRC also qualify for the same 80% mandatory relief under s.43(6A).

Billing authorities may grant up to a further 20% discretionary relief to charities, taking total relief to 100%. Whether they do depends on local policy, budget pressure, and political will. Many authorities historically granted the full 20% to most charities; the post-2010 austerity period has tightened policies in many areas.

For non-charitable non-profits (CICs, sports clubs not on the CASC register, social enterprises, certain community organisations), s.47 is the only route. The local authority may grant up to 100% relief but is not obliged to grant any. The application typically asks for:

• Evidence the organisation is non-profit-distributing
• Evidence the premises are used for sport, recreation, education, social welfare, or another qualifying purpose
• Latest accounts and constitution / governing document
• Evidence of community benefit and local impact

Authorities increasingly cap discretionary relief at lower levels (50% or 75% rather than 100%) and may attach conditions on local benefit, opening hours, or beneficiary access.

A village hall that hires out its space frequently raises a specific question: does the “wholly or mainly” test apply to the hall's own use, or to the aggregate use including hirers?

The position established by case law and Valuation Office Agency (VOA) guidance: the test applies to the hall's use as a whole. Where a village hall trust owns the property and lets it for a mixture of charitable activities (community groups, charity fundraisers, parish council meetings) and commercial / social events (weddings, private parties), the question is whether the overall pattern of use is wholly or mainly for charitable purposes.

Most properly-run village halls clear this test comfortably. The VOA and billing authorities apply common sense — a hall used mainly by community groups, with occasional private hires to cross-subsidise the community programme, qualifies.

• Small Business Rate Relief (SBRR). Up to 100% for properties with rateable value below £12,000; tapered to £15,000. Cannot be claimed alongside charity relief — choose whichever is more advantageous (almost always charity relief)
• Rural Rate Relief. Available for certain rural businesses (sole village shop, post office, pub) in qualifying rural settlements. Some village halls technically eligible
• Empty Property Relief. 3-month rate-free period when a property becomes empty (6 months for industrial); zero rates for property that becomes empty while occupied by a charity, until the charity reoccupies or the property is re-let
• Hardship Relief (s.49). Discretionary relief for ratepayers suffering hardship; rarely used for charities but theoretically available

From 1 April 2025, private schools in England are excluded from the 80% mandatory business rates relief regime, even where they are registered charities. Affects state-registered independent schools that previously claimed mandatory relief; does not affect other educational charities.

1. Identify the rated occupier. Usually the ratepayer on the bill — often the charity, sometimes the trustees of an unincorporated charity, sometimes a head tenant
2. Contact the billing authority (district or unitary council). Many publish a charity-relief application form
3. Apply for both mandatory and discretionary relief in the same application. Mandatory relief is awarded automatically on confirming charity status; discretionary is a separate decision
4. Supply supporting documents — charity registration certificate, latest accounts, evidence of wholly-or-mainly charitable use
5. Backdate where appropriate. Mandatory relief can usually be backdated to the start of the current rating period (1 April) if claim is made within the year. Authorities vary on backdating discretionary relief
6. Renew if requested. Some authorities ask for evidence of continuing eligibility annually

• Charity accounting thresholds →

  The accounts the billing authority may ask for as part of a relief application.

• CIC vs charity →

  Rates relief is one of the biggest tax differences between the two forms.

• Converting a CIC to a CIO →

  If rates relief is material to your operation, this is the route to mandatory relief.

• Compliance hub →

  All compliance guides on one page.

• Local Government Finance Act 1988, s.43 (mandatory rates relief), s.43(6) (charities), s.43(6A) (CASCs), s.47 (discretionary relief), s.49 (hardship), s.45 (empty property)
• Local Government Act 2003 amendments
• Valuation Office Agency (VOA) guidance on charitable relief
• HMRC CASC scheme rules
• Government policy change re private schools, in force 1 April 2025
• Billing authority discretion under s.47 — confirm local policy with your council