For many charities and non-profit organisations, every pound saved on overheads can mean more funds directed to the cause. One area that often causes confusion is business rates. Do charities pay business rates? And if so, can they reduce them or claim relief?
Business rates are a tax on most non-domestic properties, including offices, shops and warehouses. For charities, this often applies to buildings used as shops, offices, or outreach centres. But the rules for charities and business rates are not quite the same as for commercial enterprises.
Registered charities are typically eligible for 80% mandatory business rate relief on properties that are wholly or mainly used for charitable purposes. This applies whether the property is owned or leased.
Local councils can provide a further 20% discretionary relief, reducing the bill to zero in some cases. This is usually considered on a case-by-case basis and may require an application.
This is a common question — do charity shops pay business rates? The short answer is yes, but with significant reliefs available.
Charity shops qualify for the same 80% mandatory relief if the shop is wholly or mainly used to sell donated goods, and the proceeds support the charity. Additional discretionary relief can reduce costs further.
Charities using part of a property for charitable purposes may still qualify for partial relief. However, business rates will generally apply to non-charitable parts of the property.
In certain cases, full exemption may be granted. For example:
Most councils require you to apply for relief. Typically, you’ll need:
Applications are usually made through your local authority’s website.
Many assume all charities automatically avoid business rates. In reality, relief depends on property use, structure, and local authority decisions. For instance:
If a property is unoccupied but intended for future charitable use, it may qualify for exemption. Councils generally require evidence of the intended use.
The rateable value is determined by the Valuation Office Agency (VOA), while your local council administers the bill and reliefs. Understanding how your property is assessed is key to ensuring correct charges.
You can visit the UK Government’s business rates checker to view the rateable value of any non-domestic property.
Yes, charity shops do pay business rates, but most are eligible for 80% relief if they sell donated goods and support a charitable cause. Councils may also offer extra discretionary relief.
Understanding whether and how charities pay business rates can be the difference between overpaying and optimising your resources. By applying for available reliefs and using your property for qualifying purposes, you can reduce your charity’s financial burden and focus more on delivering impact. Need help navigating this process? Contact your local authority or seek specialist advice to ensure you're making the most of the available support.
Bookmark this guide, apply for relief with your council, and keep your charity’s finances in check.
