‘Bluetooth’ Rates Avoidance Scheme Fails
The Public Safety Charitable Trust was wound up this month after it failed to defend claims by three local authorities for arrears of business rates (NNDR) exceeding £100,000.
The PSCT operated by taking leases of empty commercial premises and installing in each one or more Bluetooth transmitters, each approximately the size of a hardback book. Those transmitters provided public safety messages to willing recipients within a 50m radius and for that, the PSCT claimed charitable relief on the entire property. The leases were usually at a nominal £1 rent and with a substantial ‘reverse premium’ payable from the landlord to the charity.
Giving judgment, Sales J found that the premises were not ‘wholly or mainly used for charitable purposes’ within the meaning of the Local Government Finance Act 1988. That test turned upon a common-sense analysis both of the uses to which the building is put and to the amount of floor-space which is occupied for that purpose. To qualify for exemption, a charity must show use of the building which is ‘substantially and in real terms for the public benefit’; it is not sufficient that the charitable use is the sole use to which the premises are put. In so finding, Sales J followed the recent decision of the Divisional Court in Kenya Aid Programme v Sheffield City Council  EWHC 45 Admin.
Public Safety Charitable Trust v Milton Keynes Council & ors  EWHC 1237 (Admin)
Comment: Although apparently a victory for common-sense, this decision creates something of a disparity between the law on charitable exemptions and on private occupation for rating purposes. After the recent decision in R (Makro) v Nuneaton & Bedworth  EWHC 2250 the insertion of such a Bluetooth transmitter, if accompanied by the requisite intention to occupy, would almost certainly qualify as occupation for rating purposes. There does appear to be something of a double standard; one rule for charities, another for private ratepayers.
Aidan Briggs writes extensively on NNDR issues. His recent article on the Makro decision appears in the October 2012 edition of the New Law Journal.