CICs and discretionary rate relief
Whereas charities pay no more than 20% of normal business rates on the buildings which they use and occupy to further their charitable purposes, Community Interest Companies do not enjoy mandatory rate relief.
The Office of the Regulator of Community Interest Companies has made contact with over 400 local authorities, to whom CICs may apply for discretionary rate relief on their buildings. The CIC Regulator acknowledges that the responses from local councils have been variable, but efforts are continuing to explain the particular legal structure and obligations of a CIC, in order to help local authorities understand their special features.
As the Regulator points out, a CIC which is a company limited by guarantee is by its constitution a “non-profit making” organisation, being set up primarily for social or environmental purposes rather than for personal gain. Hopefully, as local authority officers and members learn more about CICs, they will be prepared to consider favourably requests for discretionary rate relief.
In the meantime, the Regulator is keen to find out from CICs what the situation is locally, so to contribute to the discussion, go to www.cicregulator.gov.uk/