Charity

We have previously reported on the Barclay Review of Non-Domestic Rates and points for which charities should be aware. One area where there has been some post-Review discussion, debate and movement has been charities coming under the ‘ALEO’ banner. An ALEO being a charity with a local authority as its member. The Review recommended removing ALEOs from the bodies that could receive charity relief from non-domestic rates.

So, what has happened next? A partial rejection of the Review’s recommendation

Recently Scottish Government has made this announcement (with our emphasis on some key words and phrases):-

Leisure and cultural venues currently run by council arm’s-length bodies will continue to benefit from charity relief from non-domestic rates.

Following lengthy consultation with stakeholders, Finance Secretary Derek Mackay today confirmed that the Scottish Government will not be accepting the recommendation of the Barclay Review to end this benefit.

It means that local authority arm’s-length external organisations (ALEOs) currently providing important leisure and cultural facilities will continue to benefit from reduced rates to support their activities.

Mr Mackay also announced he will take steps to offset the charity relief benefit to councils from any new ALEO expansion in future.

The Cabinet Secretary said: “We are committed to an active and healthy Scotland with a vibrant cultural life and we will continue to support local authorities in providing affordable ways for their communities to take part in culture and leisure activities.

“In my response to the Barclay review I made clear that this was a recommendation that I wished to engage on before coming to a conclusion. In these discussions I have heard a strong and consistent message about the importance of this benefit to sports and leisure facilities and to keeping the costs of these services affordable especially in disadvantaged and vulnerable communities.

“As a result I can confirm that the rates relief will remain in place for qualifying facilities operated by council ALEOs.

“However I am aware that some councils are planning to increase the numbers of ALEOs and the number of facilities no longer paying rates. It is my intention to mitigate against this by offsetting any further charity relief benefit to councils to deter future ALEO expansion.”

The future

We will continue to monitor developments on charity rates relief. As we noted in our previous blog, there are charities and third sector issues beyond ALEOs in the Review.

This blog was written by Alan Eccles – @BCharitable 

 

Alan Eccles

Alan Eccles

Partner at Brodies LLP
Alan is a Partner in the private client department, based in Glasgow, covering three main areas: charities, private client and parliamentary matters.
Alan Eccles