Court finds tribunal erred in determining charity shop building subject to commercial rates

Ann O'Loughlin

A tribunal was wrong in determining that a charity shop building should be subject to commercial property rates, a High Court judge has ruled.

Ms Justice Siobhan Phelan held that the valuation tribunal failed to properly consider that the National Council for the Blind of Ireland (NCBI) retail company is a registered charity with a charitable purpose of fundraising through its shops.

She said the tribunal incorrectly focused on what the property on Oldcastle Road in Virginia was being used “as” (retail), rather than asking what its purpose was (to fund charitable activities).

Commercial rates are a property-based tax levied by local authorities on the occupiers of local commercial or industrial properties.

The judge said the focus of the case before her was whether NCBI Retail used the shop “exclusively for charitable purposes” and “otherwise than for private profite”, which would exempt it from having to pay commercial rates.

The case had been referred to her to determine a point of law.

Outlining the background, the judge said a valuation certificate had been issued to NCBI Retail in 2019 stating a €7,170 valuation for the Virginia property. NCBI Retail appealed to the valuation tribunal, which in late 2022 upheld the finding that the property is rateable.

NCBI Retail, which has 130 charity shops that could have been affected by the valuation decision, claimed it should have been excluded from the valuation list.

The judge said profits generated by the NCBI retail outlets must be applied solely towards the promotion of the charity’s main objective of enabling people with vision impairments to overcome impediments to their independence.

The judge said the appellant’s parent, the NCBI Group, is contracted through the Health Service Executive to provide various services.

The HSE contract pays €6.69 million, while the cost of services is €10.5 million, she said. The charity shop income and other fundraising activities are used to plug the funding gap.

The commissioner of valuation claimed that the retailing of goods is not a charitable purpose, even though NCBI Retail is a registered charity.

Ms Justice Phelan found that the use of the shop in Virginia is “directly in line” with NCBI Retail’s charitable purpose. The tribunal misdirected itself by relying on its own previous decisions which run counter to several authorities from the High and Supreme courts, she said.