28 February 2005 Minister Announces Consultation on Policy Proposals for Charitable Exemptions and Relief from Rate Liability for the Non domestic Sector
The Finance Minister, Ian Pearson MP, today announced a sixteen-week consultation on policy proposals on a range of rate reliefs.
The measures are designed to encourage community based activities by increasing rate relief for amateur sports clubs and community halls and also proposals to extend relief to all church houses.
Launching the Government's Policy Paper, the Minister said:
"The Government's aim on rating reform is to create a rating system for Northern Ireland that is modern and distributes the burden of taxation to support local public services fairly among all ratepayers, but it can also be a useful way of providing support to worthy causes. To achieve this aim I have decided to extend the review into consideration of the relevance and adequacy of the existing range of exemptions for charities and non profit organisations that have not been questioned in recent years."
Mr. Pearson went on to say:
"The public consultation exercise on the Review of Rating Policy launched by the then Executive in 2002 identified some potential areas for reform. During that consultation exercise, arguments were put forward to change the existing provisions on such diverse categories of property as sport and recreation facilities, charity shops, universities and community halls and domestic property owned and occupied by Clergy."
He continued:
"The Paper outlines the current legislation in relation to charitable exemptions in Northern Ireland and explores the rationale and anomalies within the current system. It draws on comparisons with the rest of the United Kingdom and, where relevant, the Republic of Ireland. The paper details policy proposals on the future treatment of these issues, including proposals for extending the relief available for amateur sports clubs, community halls and church houses."
The Minister stressed the importance of the opportunity for interested parties to contribute to this important area of rating policy and legislation, although he added a word of caution. He said:
"Whatever system is adopted following consultation there will be costs involved that ultimately have to be met through rates. Granting widespread exemptions is not a cost free option as, in effect, it means that other ratepayers pay more to support key public services in Northern Ireland."
Finally Mr. Pearson said:
"I believe the reforms outlined in this policy paper are necessary and to the benefit to the wider community in Northern Ireland. They demonstrate that the Government does respond to views expressed through public consultation."
NOTES TO EDITORS:
- On 27 May 2002, the then devolved Finance Minister, Dr Seán Farren MLA, announced the Review of Rating Policy. This had been identified in the Executive's Programme for Government in 2000 and its scope and terms of reference agreed in 2001.
- As part of the ongoing Review the Government is proposing a number of policy changes to the current charitable exemptions and reliefs in the non-domestic sector. The proposals are (i) to increase the current level of rate relief for amateur sporting facilities from 65% to 80% in line with the position in Great Britain; (ii) to grant unlicensed community halls full exemption from rates provided they are made available for use by the wider community and (iii) to extend the current relief for church owned houses to houses owned and occupied by Ministers of Religion and similar clergy on grounds of equity of treatment.
- The total annual revenue raised from non-domestic rates in Northern Ireland is approximately £371 million. All of this money goes to support the provision of local public services. It is estimated that, using 2004/2005 average non-domestic rate poundages, charitable exemption amounts to approximately £46 million in revenue foregone.
- The consultation period ends on 17 June 2005.
- The consultation paper is available on the Rating Policy website: http://www.nics.gov.uk/ratingpolicy/
