Removal of rate relief from some 'charity' shops
Concern was expressed by councillors that plans to remove rate relief from shops who are selling items for charitable purposes and are resultingly competing with local businesses, led to a heated debate in the council chamber.
Head of Finance Annette O'Neill said traditionally Wexford County Council has provided full relief of rates to properties claiming to be in operation for charitable purposes.
Ms O'Neill said in recent years it became clear that some of the ratepayers claiming this rates relief were, in fact, deriving a profit from the business.
As a result some enhanced controls were implemented including a requirement to provide evidence of registration as a charitable body with the Revenue Commissioners to qualify annually for the current rates relief applied.
Ms O'Neill said it will take several months for charity shops to register for the 2018 rates relief.
Sixty rate accounts have availed of full relief from commecial rates in 2016 to date on the basis that these properties are registered as charitable organisations. The total value of the rates relief for these properties is €231,381.
Ms O'Neill said the minority of the properties are in competition with other rate-paying businesses in the county. She said around 24 of the rate accounts comprise businesses that are in direct competition with other ratepayers with an estimated annual rates charge in the region of €80,000.
Cllr Michael Sheehan said many rate paying businesspeople are doing everything they can to stay open. 'They are competing with charity shops who are not paying rates. There are several shops that are in our towns that are operating free gratis. They are making things difficult for the ordinary rate payer.'
Cllr Davy Hynes said many charities depend to a great extent on their shops. 'If you didn't have charity shops during the recession you would have had a lot of empty premises on the streets of these towns. A lot of charities don't get any help.'
Cllr Oisin O'Connell expressed concern about having too broad a definition of what a charity shop is.
'It could squeeze out people who are not competing with other retail outlets.'
Ms O'Neill said any business which has failed to be awarded charity status can appeal the decision. 'If they are selling second hand clothes I don't know if they can be deemed to be in competition but it's up to the valuation officer.'
Cllr Willie Fitzharris said the move could have an unintended adverse effect on worthwhile projects, while Cllr Johnny Mythen said certain charities like Talk to Tom rely totally on income made through their charity shop.
Ms O'Neill said if the shop's books show that they are making a profit they may not be eligible for the relief. She said Wexford County Council was operating outside national practise by allowing the reliefs.
'We were doing this for practical reasons as it was taking too long for the valuation process. I would fully expect that all of the charities will get the exemption but it gives us a justification to tell the other retailers who are contacting us on a regular basis. I honestly don't think there will be an issue at the end of this.'
Cllr George Lawlor called for the matter to be adjourned. He asked if charity shops are designated core retail, adding that a number of legitimate businesses were denied planning permission to open in Wexford town as they were not deemed to be core retail.
'They would have employed people and the businesses would have paid rates but a charity shop can come in to a main retail area and because of their designation as core retail open.'
Cllr Hynes seconded this proposal, saying: 'I'd be afraid that we'd rush this.'.
Cllr Jim Moore said charity shops run by community groups raise money which is reinvested in communitiies across the county.
Cllr Sheehan said certain shops with charitable status designation run cafes and merchandise and are very 'slick'.
'They are using the banner for their on purposes,' he said.
Wexford County Council CEO Tom Enright said: 'We can bring this back for discussion (at the next meeting) but it gives a little less time for the charities. There is legislation going thorugh at the moment which gives preference to certain types of retail over others, increasing the cost of rates to business you don't want on the main street, like betting shops and amusement arcades and so on.'