Tax Avoidance – the lawful avoidance or reduction of tax by arranging one’s affairs in order to minimise the amount of tax payable

“Wholly or mainly used for charitable purposes” refers to the amount of actual use and not the purpose of the use

Wi-fi hereditament in Cheshire case referred to all 13

Wi-fi might work for 6 weeks

Wi-fi does not work for charitable status

Chester and West Cheshire Council v Public Safety Charitable Trust 2012

• Chester and West Cheshire Council v Public Safety Charitable Trust 2012

• Substantial office in Chester

• 4 floors, RV £52,500

• Landlord – Tameside MBC

• Vacant since 2010

• PSCT had a leasehold agreement from December 2010

• Installed 13 Bluetooth transmitters

Lease for 1 year to December 2011

• Lease for 1 year to December 2011

• Rent of £1 per annum

• Reverse premium of £7,607.25 payable by landlord to PSCT

• Terminable at 7 days notice

• Second lease for 1 year to December 2012

• PSCT has a contractural arrangement with Commercial Links to install and maintain Bluetooth equipment

PSCT applied for charitable relief in February 2011

• PSCT applied for charitable relief in February 2011

• PSCT is a registered charity formed in 2010

• PSCT is non-profit making

• Charitable objects to promote the efficiency of the police and prevention and solution of crime

• Mandatory and discretionary relief granted

• About 60 similar applications by PSCT received

• June 2011 – Council removed discretionary relief

• August 2011 – removed mandatory relief

September 2011 – Council contacted VOA

• September 2011 – Council contacted VOA

• November 2011 - VOA created a new hereditament from 12 December 2010 for a “WiFi site at 1 Heritage Court” RV £100

• Council granted mandatory relief on WiFi hereditament – accepting the charitable occupation

• New demands for empty rate on offices and liability orders sought

• It does not appear to the Council that when next in use it will be used for a charitable purpose

13 Bluetooth boxes monitored remotely

• 13 Bluetooth boxes monitored remotely

• Communication Links visit the property no more than once a month to check and reposition equipment

• Need access throughout the building

• Each box needs an electricity supply

• There is one “WiFi hereditament” within the building but 12 other transmitters within the office building

Meets the 4 ingredients of occupation of the offices

• Meets the 4 ingredients of occupation of the offices

• PSCT is a registered charity

• Council accepts the use is charitable

• Is it “wholly or mainly” used for a charitable purpose?

• Different from the Edinburgh case because regular access is required to the whole building

• Liability order refused and the Magistrates’ Court found that PSCT are entitled to mandatory relief and should ask the Council to reconsider discretionary relief

• Appeal to the High Court that hereditament is not “wholly or mainly” used for charitable purposes

• High Court found that it was not “wholly or mainly”

• used for charitable purposes

South Cambridgeshire case billing authority refused mandatory relief – separate wi-fi hereditament

• South Cambridgeshire case billing authority refused mandatory relief – separate wi-fi hereditament

• Milton Keynes case – billing authority refuse mandatory relief – no separate wi-fi hereditament

• PSCT lost all 3 cases

• PSCT under investigation by Charity Commission since October 2011

• PSCT subject to formal enquiry by Charity Commission since May 2013

• PSCT wound up in the High Court in July 2013

Africa Relief Trust under investigation by Charity Commission since October 2011

• Africa Relief Trust under investigation by Charity Commission since October 2011

• Concerns regarding its business rates relief arrangements

• Formal inquiry by Charity Commission since 12 July 2013

• The purpose of the inquiry is to examine regulatory concerns including whether the charity trustees have properly discharged their trustees duties when making decisions to enter into tenancy agreements and occupy those properties to further their charitable purposes and whether any benefit to the landlord or other parties is incidental to that

• The Commission has issued alerts to charities warning

• them of the risks associated with business rates relief

Insolvency Service guidance – dear IP March 2012 Issue 53 chapter 26, Companies Investigation Branch

• Insolvency Service guidance – dear IP March 2012 Issue 53 chapter 26, Companies Investigation Branch

• www.insolvencydirect.bis.gov.uk/insolvencyprofessionandlegislation/dearip/dearipmill/chapter26.htm#3

• On 29 July 2011 The Insolvency Service’s Company Investigations successfully applied for the winding up of 13 companies

•