19th June 2023 | Guy Morgan | Commercial Property, Charity, Health and Social Care

Clarity can sometimes appear hard to find in the arcane world of business rates.

However, in a significant judgment, the Supreme Court have unanimously ruled that a health charity can qualify for mandatory 80% relief from non-domestic rates in respect of a health and fitness club it runs, clarifying a well-established legal principle.

This ruling makes clear that where a charity is using premises for its core charitable purposes, the charity should be entitled to mandatory rates relief.

This decision will deliver some much-needed reassurance to charities on this point.

The case centred upon a members-only gym in Merton, South-West London, run by health giant, Nuffield Health.

The local authority had initially withheld rating relief on the grounds that Nuffield was operating a commercial gym that had no public benefit. In particular, they argued that the membership subscriptions charged put this facility out of reach of many in the community.

However, the Supreme Court (upholding the decisions of the lower courts) thought otherwise, finding that Nuffield “plainly uses the Merton Abbey gym for the direct fulfilment of those charitable purposes”. Nuffield qualified for business rates relief, after all.

Speaking about the judgment, Charities law expert and partner, Shane Knight commented:

“Rating relief is several billion pounds a year for the third sector. Without this decision, many charities would have faced massive hardship at a time when we are all still feeling the chill wind of a cost-of-living crisis.  Charities should also be aware that there is a further discretionary rating relief that they can apply for directly from their local authority.”

Sherrards Partner, Guy Morgan, observed: “The decision removes any doubt on this point.  Any landlord must also take this into account, when letting property to a tenant”.

Based in London and St Albans, Sherrards Solicitors has a large team of specialist lawyers acting for charities and those in the health and social care sector.

For further information, please contact law@sherrards.com