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Potential business rates savings for academies

January 2016

As a charity, occupying and using school premises for school purposes, academies are entitled to an 80% reduction in their business rates.

In respect of "national non-domestic rates" bill (commonly known as business rates), the local authority has discretion to waive the 20% that it can claim and, historically, most local authorities have always done so for charities including academy trusts.  However, with the funding squeeze, some local authorities are looking again at this policy and it may be that some decide not to use this discretion any longer.

In addition, some local authorities and the valuation office are looking more closely at school sites and in some cases have sought to impose separate ratings on different parts of the school site rather than treat the whole site as one. In particular those buildings that are not used for "school" purposes or not occupied by a charity. 

If this is the case, then the full 100% rateable value will most likely be payable on such buildings.  The obvious candidates that could fall foul of this type of approach are sports centres which are used by the community. These are often leased to a subsidiary company (which the DfE recommends) and so are not occupied by a charity or because they are also let to sports groups/open to the public and so are not being used for school purposes

If you find that you are looking at a sizeable rates bill because of either of these approaches, please speak to us for advice. Houses on school sites are also likely to be separately assessed for Council Tax rather than business rates.

In the longer term central government is currently looking at non-domestic rates overall and one suggestion is that all schools should be made exempt. If it happens this would solve the 80:20 issue, but will not necessarily alter how the school site is categorised for different activities with some parts being rateable and others not.

This is another developing area and another area which could lead to squeezes on the school budget.

If you would like to discuss any aspect of this article further, please contact Emma Ridge or Tim Wrigley on 0113 244 6100.

You can also keep up to date by following Wrigleys Schools team on Twitter here

The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors

 

 

Emma Ridge View Biography

Emma Ridge

Partner
Leeds

Tim Wrigley View Biography

Tim Wrigley

Partner
Leeds

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