Petition
PE2236: Transfer administration of mandatory charitable rates relief to independent third sector processes
PE2236: Transfer administration of mandatory charitable rates relief to independent third sector processes
Calling on the Scottish Parliament to urge the Scottish Government to transfer the administration of mandatory charitable rates relief from local authority non-domestic rates departments to an independent, third sector-led or community focused system. This will ensure that applications from volunteer-led charities are considered with a proper understanding of how voluntary organisations operate, rather than through a narrow revenue collection and enforcement lens.
Background information
The current system places the administration of mandatory charitable rates relief with local authority non-domestic rates departments operating in a revenue and enforcement culture. This leads to lengthy processes and enforcement action against volunteer-led charities qualifying for 80% mandatory relief under the Local Government (Financial Provisions etc.) (Scotland) Act 1962.
Moving to an independent, third sector-led process would allow assessments to be carried out with a better understanding of how voluntary organisations operate, reducing the burden on volunteering communities.
Volunteer Scotland’s April 2025 report shows formal volunteering in Scotland is in crisis. Administrative demands disproportionately burden volunteers who contribute during evenings and weekends, while local authorities use multiple paid officers. This creates unnecessary barriers for small volunteer-led charities.
- Created by Tommy Reid
- Considered from 29 July 2026
PE2236/A: Transfer administration of mandatory charitable rates relief to independent third sector processes Scottish Government written submission, 23 September 2026
Response
Does the Scottish Government consider the specific ask[s] of the petition to be practical or achievable?
If not, please explain why. The Scottish Government does not consider the specific ask of the petition to be practical or achievable. NDR is a tax on property – the non-domestic equivalent of Council Tax (which pre Poll Tax was actually called Domestic Rates) - and an integral component of the Local Government Settlement. While Scottish Government sets NDR policy including tax rates and reliefs, local authorities are responsible for the administration and collection of NDR, including billing.
All reliefs are administered by local authorities reflecting their local knowledge and expertise. Charity relief has existed in some form since 1962. Registered charities are eligible for 80% mandatory relief which councils can top up to 100% at their discretion. This is only if their property is mostly used for charitable purposes. This could be by the charity occupying the premises, or by other charities. Councils can also offer up to 100% discretionary relief on properties used by other not-for-profit organisations. To qualify, the purpose of occupation must mainly be charitable or otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts. Whether a property meets this qualifying criterion is a matter for the relevant local authority to determine. Transferring those responsibilities, which ultimately determine a property’s statutory tax liability, to an independent, third sector-led or community focused system would be unprecedented and introduce significant financial and policy risks.
As a minimum, extensive and likely complex legislation to establish the necessary accountability and assurance framework would therefore be required, and significant additional costs would inevitably be incurred. Mandatory charity relief benefited 11,470 properties as at 1 June 2025 and is forecast to cost £233 million in 2026-27. The cost of the relief is fully funded by Scottish Government through the operation of the Non-Domestic Rating Account. Local Authorities have no direct financial stake in whether an award is made or not and therefore the premise of the petitioner’s argument is unsound. What, if any, action is the Scottish Government currently taking to address the issues raised by this petition, and is any further action being considered that will achieve the ask[s] of this petition?
1 The administration of the Non-Domestic Rates system is a matter for local authorities in accordance with the statutory framework established by the Scottish Parliament. Scottish Ministers are committed to a comprehensive review of Non-Domestic Rates and Reliefs including improvements to the ratepayer experience but there are no current plans to revisit the administration of the system itself. Is there any further information the Scottish Government wish to bring to the Committee’s attention, which would assist it in considering this petition? Historically charity relief has unfortunately been used to facilitate tax avoidance. For example, charities taking on disused warehouses to be used superficially for storage or advertising allowing those properties to cease claiming Empty Property Relief and claim charity relief which is likely to be more generous. A number of provisions in the NDR (Scotland) Act 2020 were intended to target this abuse. Local authority’s current powers would still be required as part of their role in targeting such tax-avoidance schemes.
Non-Domestic Rates Team, Local Government and Analytical Services Division 2
Petition Reply
By Tommy Reid
PE2236/B — Comment on PE2236/A
(Scottish Government written submission, 23 September 2026)
Tommy Reid, Petitioner — 23 September 2026
Scope
This submission comments on PE2236/A (Scottish Government written submission dated 23
September 2026). It is limited to new points arising from that submission and does not repeat the petition background. It does not attach correspondence, photographs, or papers relating to any
individual file.
1) PE2236/A frames the issue as “financial stake” and “avoidance risk”; the petition concerns
process and decision-maker
PE2236/A states that local authorities have “no direct financial stake” in whether mandatory charity relief is awarded, and concludes that the petitioner’s premise is unsound. That sentence may be true of the 80% cash line (funded through the Non-Domestic Rating Account), but it does not address the petition’s core point: who determines the statutory test, by what process, and with what safeguards against enforcement running ahead of determination.
It is also incomplete as a description of incentives. If mandatory relief is not awarded, the council’s billing and recovery function will collect the full charge from the charity. Even where the 80% element is nationally funded in accounting terms, refusal or delay of relief has a direct cash
consequence for the applicant and is experienced as a revenue outcome at the point of collection.
The petition is not a claim that councils “pocket” the forecast £233 million if they refuse an award.
It is a claim that a mandatory entitlement can be rationed in practice through administrative
burden, evidential escalation, and enforcement sequencing.
2) “Local knowledge and expertise” does not explain the cross-council procedural similarity being reported PE2236/A relies on the proposition that reliefs are administered by local authorities reflecting “local knowledge and expertise.” The difficulty is that the same sequence is being reported across
otherwise independent councils, including unannounced external visits; snapshot photographs
treated as proof of non-use; delayed or refused disclosure of the material relied upon; and recovery action while an application remains undetermined.
That similarity is not explained by local knowledge. It is consistent with a shared administrative
environment: common fiscal pressure, common professional training, and common recovery tools.
The point is not conspiracy. It is that procedural barriers can converge across councils even where each council is formally independent.
3) Entitlement vs discretion: “determine” is not the same as “withhold”
PE2236/A states that whether a property meets the criterion is “a matter for the relevant local
authority to determine.” Determination of fact is necessary. It is not a discretion to refuse the 80% once those facts are met.
Section 4 of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 creates an
entitlement where premises are occupied by a charity and used wholly or mainly for charitable
Purposes: https://www.legislation.gov.uk/ukpga/1962/9/section/4
If those two conditions are satisfied, the relief is a right, not a favour. The council’s task is to check the facts. It is not to invent extra tests, delay the award, or treat the 80% as optional because a snapshot from the street looked quiet.
The Scottish Government’s own published Non-Domestic Rates legislation and relief material
continues to use that statutory wording and states that the mandatory relief is not time-limited:
https://www.gov.scot/publications/non-domestic-rates-legislation/
The petition’s concern is that the statutory test is being displaced by extra-statutory proxies (for
example, daily footfall, retail-hours opening, pavement-visible signage, or commercial occupancy packs) which are not prescribed by the 1962 Act.
4) Anti-avoidance powers should not become the template for volunteer-led charitable use
PE2236/A correctly notes historic “empty warehouse” avoidance and the purpose of provisions in the Non-Domestic Rates (Scotland) Act 2020. However, the petition concerns the opposite error: treating volunteer-led, intermittent, upstairs, event-based, or space-giving charitable use as non- use because it is not continuously visible from the street.
Warehouse schemes manufacture occupation to reduce liability. The petition concerns the denial of charitable use based on snapshots and external appearance, rather than a purposive inquiry into charitable activity over time.
PE2236/A’s “further information” for the Committee is confined to the cost of relief and to historic
avoidance. It does not describe the ordinary case the 1962 Act was written for: a registered charity using premises for its objects. A system explained only as a fraud-control function will treat genuine, less visible charitable use as a risk to be refused, not as an entitlement to be assessed.
What the petitioner asks the Committee to seek
1. Confirmation that mandatory 80% relief is an entitlement under section 4, not a local discretion, once the statutory test is met.
2. A statement on whether recovery action should wait until that test has been completed.
3. Consideration of an independent or third-sector process for the “wholly or mainly used” inquiry, even if billing and collection remain with local authorities.
4. Confirmation that anti-avoidance powers aimed at empty-warehouse schemes are not treated as the template for assessing volunteer-led, intermittent or space-giving charitable use.
I remain willing to give evidence.
Tommy Reid