Do we have to pay business rates?

England: This page sets out the position in full. Wales: covered, and the same legal basis as England, with its own separate school exclusion — see below. Scotland: covered, and a genuinely different regime — a different Act, a written-notice precondition, and its own definition of “charity” — see below. Northern Ireland: covered, and structurally different again — an exemption by distinguishment in the valuation list, not a relief at all — see below.

What has changed in charity business rates relief?

Two things have changed. The legal basis for relief in England and Wales moved in 2024. Private and independent schools are now excluded in England, Wales and Scotland.

Charity business rates relief is the reduction in business rates for property a charity uses wholly or mainly for charitable purposes. Trustees need it for every property the charity occupies.

The page assumes the charity already occupies the property. If it has not yet settled how to hold it, decide whether to sign a lease or a licence first. Get either change wrong and the answer is dated immediately.

First, the England and Wales legal basis moved in 2024. The Non-Domestic Rating Act 2023 repealed the old rule. Charity relief now sits in new schedules of the Local Government Finance Act 1988.

Anything still citing the old section number is out of date on its own terms. That may include whatever the reader has already found by searching. The relief itself has not changed. Only its legal home has.

Second, private and independent schools are now excluded from charity rates relief in England, Wales and Scotland. Each nation uses a different definition, with different exceptions. This is not one rule with local variations. It is three separate exclusions.

A source that merges them into a single sentence is doing the reader a disservice. The table in the school exclusions section keeps them apart.

How does relief work in England and Wales?

Mandatory relief is the relief a charity gets by law, without an application, where a property is wholly or mainly used for charitable purposes. The bill is cut by 80%. Discretionary relief is a top-up the council may then grant on the remainder.

But this is a pure discretion. A charity that assumes it will be granted is assuming something it has no legal right to. The council can also revoke it. A top-up granted this year is not guaranteed next year.

A charity shop trades on the goods it sells, not on who runs it. The rule tests the goods themselves. A shop selling mostly bought-in stock, not donated goods, can fail the “wholly or mainly” test — even where a charity plainly runs it.

How does relief work in Scotland?

Scotland runs on its own separate statute. Not a local variation of England’s. The mandatory relief rate is the same headline figure — 80% off the ordinary bill. But the process is not automatic. A notice in writing to the rating authority is a legal precondition, not an office formality. No notice, no relief.

“Charity” also means something narrower in Scotland: a body entered on the Scottish Charity Register. A charity recognised by HMRC for tax purposes, but not on that Register, does not qualify on that basis alone. Separately, there is no minimum income a charity must clear to enter the Scottish Charity Register at all. England and Wales work differently.

How does Northern Ireland treat charity property?

Northern Ireland exempts charity property by distinguishment rather than granting a relief. Do not describe it as a more generous version of England’s relief. The property is taken out of the ordinary valuation list. This relieves up to 100% of what would otherwise be due, with apportionment where use is mixed.

Treat Northern Ireland as structurally different, not just numerically different, from England and Wales.

The private and independent school exclusions

England, Wales and Scotland have each excluded private and independent schools from charity rates relief. None defines the exclusion the same way. None carves out the same exceptions. Set them side by side. Do not describe “the schools exclusion” as though it were one thing:

This page did not independently verify the detailed start dates and funding splits behind these three rules. Treat the existence of three different definitions as established. Check any individual school’s own position directly before relying on it.

If the charity is buying a property, the next step, claiming relief on property transactions, covers the tax on buying it.

Common mistake: budgeting on the assumption that the discretionary top-up will be granted

Many councils do grant it. Charities hear about it from peers elsewhere. But it is a pure discretion, revocable by a further council decision, with no legal right behind it.

Common mistake: a Scottish charity assuming relief applies automatically

In England and Wales the mandatory element needs no application. Scotland is different: the Act requires notice in writing to the rating authority. No notice, no relief.

Common mistake: a charity shop assuming it qualifies because a charity runs it

The deeming rule tests the goods sold, not the occupier. A shop selling substantially bought-in stock rather than donated goods can fail the “wholly or mainly” test.

Worked example

Saltmarsh Trust has premises in both England and Scotland — already established elsewhere on this site as a charitable company with more than one site. In England, mandatory relief applies to its premises that qualify with no application needed.

In Scotland, the same outcome needs written notice to the rating authority first. It also depends on Saltmarsh being on the Scottish Charity Register. Two extra steps, with no equivalent south of the border.