£1.6m rates setback for Sheffield

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Sheffield Council has suffered a High Court setback in its fight to make an international aid charity based in two enormous warehouses pay more than £1.6 million in business rates.

Kenya Aid Programme occupies two units on Europa Way, Tinsley – which together have a floor area of more than 116,000 sq metres.

Its rent is peppercorn and its landlord donates thousands of pounds each year to the charity.

The council issued business rate demands for 12 months to the end of March 2012, totalling more than £1.6 million.

But KAP insisted that, as a registered charity, it was entitled to 80 per cent relief from those sums. It is reimbursed the other 20 per cent by its landlord.

The council won the case at Sheffield Magistrates’ Court in October when a district judge rejected KAP’s plea that the warehouses are being used ‘wholly or mainly’ for charitable purposes.

The judge said that if the warehouses were empty instead of being occupied by a charity, 100 per cent of the rates would be payable – and the charity was making ‘inefficient’ use of them.

But Kent-based KAP challenged the decision in the High Court.

Lord Justice Treacy, sitting with Mr Justice King, said the efficiency of the furniture storage use of the warehouses was irrelevant, as was the reasonableness of KAP’s occupation of both of units.

The case will now go back for reconsideration by the district judge.

Sheffield Council cabinet member for finance Coun Bryan Lodge said: “It is disappointing that the High Court has ruled against us. Unfortunately, in this case we were not satisfied that the charity meets all the requirements for relief from rates.”