Business Rate Relief: The Thousands of Pounds CICs Leave on the Table

A CIC we work with recently opened a second shop. They already had one shop in another local authority area that had been given full business rate relief. When they applied for relief on the second shop, they were refused.

This matters because business rates can make or break a community enterprise. For a small CIC with tight margins, a few thousand pounds in unexpected rates can be the difference between viability and closure.

In this particular case, the CIC appealed. We helped them put together the evidence, communicating the community benefit they bring to the area. The appeal was successful. They’re now saving thousands annually — a fundamental improvement in their business viability.

But the question I keep coming back to is: why did it have to be an appeal? Why wasn’t the relief granted in the first place?

The answer, as with so many CIC issues, is awareness. Most local authorities don’t have a clear policy on CIC business rate relief. Unlike charities, which have a well-established framework for mandatory and discretionary relief, CICs fall into a grey area. The decision is left to individual local authorities, and many of them simply don’t know what a CIC is or why they should support one.

This is something we need to fix. The Local Government Association is the obvious channel — if we can get good information about CICs into the hands of local authority finance teams, we can change the default response from “refuse and see if they appeal” to “grant relief because these organisations deliver community benefit.”

There’s also a strategic opportunity here. If we can identify which boroughs are actively supportive of CICs, we can help our members target their activities where they’ll get the best reception. Business rate relief could become a tool that local authorities use to attract socially-minded enterprises to their area.

If you’re a CIC and you’re paying full business rates, check whether you’re eligible for relief. The rules vary by local authority, but it’s always worth asking. And if you’re refused, appeal. We’re building a library of case studies to support appeals like the one above.

Thousands of pounds is a lot of money for a small CIC. It’s worth spending the time to get it right.