Charity shop rate relief: 'Nearly 20% may shut in Wales'

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Media captionA consultation on the proposals ends later this month

Nearly a fifth of Wales' charity shops could close if the Welsh government implements proposed changes to business rate relief, a charities group says.

The Charity Retail Association has told an "emergency summit" that it could cost charities millions of pounds in lost profit as well as employment and volunteering opportunities.

Proposals include changing the mandatory relief rate from 80% to 50% and a sliding scale of charges.

A consultation ends later this month.

The independent review of business rates for charities was chaired by Prof Brian Morgan of Cardiff Metropolitan University, who published recommendations in April.

These included:

  • New business rate thresholds for charity shops based on the property value, ranging from 80% for the lowest value to 0% for the highest
  • Cut rate relief for all charity shops from 80% to 50%
  • Zone or limit charity shops in a given area

Wales has more than 500 charity shops, of which the Charity Retail Association (CRA) represents more than three-quarters.

CRA representatives met assembly members at the Senedd.

A survey of its members found that if only the first of these proposals was introduced then 15% of Welsh charities would close, £1.9m of profit would be lost to Welsh charities, and 130 jobs as well as 1,800 volunteer posts would be scrapped.

The CRA conducted a similar survey in October 2012 asking about the impact of the second proposal on charities.

They expected that £1.54m would be added to their projected rates bills, reducing profit by 11%, and 95 of the existing 512 charity shops in Wales would close.

Warren Alexander, CRA chief executive, said: "We reckon 80 shops are going to close, 130 paid people are going to lose their jobs, and nearly £2m is going to be lost from charity income.

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Media captionBBC Radio Wales' Good Morning Wales programme spoke to some of the people who could be affected

"The report represents a wholesale attack on charity shops which will do nothing to save the high street but will directly affect the lives of people in Wales who rely on charitable services such as hospice care."

The CRA chief executive argued that rate relief for charity shops in Wales is only worth £3.4m a year - while rate relief for small businesses is worth £75m.

"So businesses do get rate relief - and quite rightly so," he said.

"Look at the damage this will do to charities and the people of Wales if they impose this tax on charity."

'Great work'

However, one of the members of the independent Business Rates Task and Finish Group, which conducted the review, defended the group's findings.

Chris Sutton said: "We recognise the great work that the charity shop sector does and the fundraising this brings about.

"What we thought is that bringing in the thresholds to the same sort of level as the small business rate relief, then what that allows us to do is to extend reliefs elsewhere and particularly towards social enterprises such as credit unions.

"And also we could look at a fresh start scheme so that those shops that have been empty for some time - say over 12 months - any occupier, regardless of sector would benefit with a significant release."

The Welsh government has previously said it is "sensitive to the many viewpoints on the issue of business rates relief for charities".

Liberal Democrat economy spokesperson Eluned Parrott said: "I urge the Welsh Labour government not to press ahead with the recommendations in the Morgan review.

"Charity shops are not the reason for the decline of our high streets. In many places they provide the foot fall needed to sustain high street shopping. The Welsh Labour government is barking up the wrong tree."

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