Plan for charity shops to lose rates exemption in Northern Ireland
Nearly half of voluntary sector leaders support a proposal to make charity shops pay rates, according to a report today. Charity shops have been 100% exempt from business rates - but since the economic downturn, growth in their presence on high streets have prompted calls for change.
A report today from CO3 - an organisation representing bosses in the voluntary sector - said that 49% of leaders surveyed support a proposal from the Finance Minister Mairtin O Muilleoir that some rates should be paid by charity shops.
In the CO3 third sector index, in partnership with Ulster Bank, under 40% of those surveyed said they disagreed with the proposal, while 22% said they didn't know. Just under half (49%) were in favour.
In proposals published by the Department of Finance in November, the minister said he believed the system of charity shop rates should be subject to "modest reform".
He proposed that, from April 2019, charity shops should incur a rating liability of up to 20% of the full rates payable, "in order to satisfy the principle that 'everyone should pay something' and maintain a healthy mix in the high streets".
The CO3 index today says it would support the reduction of the rates exemption from 100% to 90%, provided that the revenue raised is used to encourage entrepreneurship in the sector.
The minister said he supported the view that income should be used to support entrepreneurship in the social enterprise sector.
"My department is consulting on the proposal to charge some rates on charity shops. I will await the outcome of that process before putting recommendations to the Executive, including looking at ways to ring fence the extra funding to help social enterprises," he said.
However, the support of the sector for cutting the rates exemption dropped where there was no guarantee of income being used to support the sector.
One-quarter of respondents also told CO3 that their organisation had seen a reduction in government funding during the fourth quarter of the year.
Ulster Bank economist Richard Ramsey said the willingness of voluntary to embrace the minister's proposals on charity shop rating showed "pragmatism".
But overall, the index found a mood of gloom in the third sector, with nearly 60% of those surveyed saying they expect the economy to get worse in 2017.
Mr Ramsey said the pessimism of the sector was unsurprising.
"Indeed, with Brexit looming on the horizon, along with other challenges such as rising inflation and the continuing fragility of the public finances, our own view is that the Northern Ireland economy is likely to stagnate this year," he said.
"We are seeing a continuing trend of more third sector organisations experiencing a reduction in funding from government sources than those seeing an increase - something that was evident throughout 2016. Indeed, in 2017 budgetary pressures are likely to intensify.
"With the Northern Ireland Finance Minister set to announce his delayed Budget this month, this will more than likely mean further rounds of funding cuts for third sector organisations."
Glyn Roberts, chief executive of the Northern Ireland Independent Retail Association, said he welcomed the support of the sector for the ratings proposal.
"There's no question that charity shops add to the diversity of the high street, but it is not unreasonable that they should make some form of contribution to rates," he said.
The minister's rating proposals also include abolishing a cap on domestic rates for houses valued at over £400,000.