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What Happens When an Arts Collective Needs Business Rates Relief on Premises

A collective of artists were happy to govern themselves, however, after moving to new studio space it soon became evident that without business rates relief the collective would soon fold. The problem was that business rates relief is only mandatory for registered charities. The collective had benefited from a period of support from their Local Authority, which had in the past exercised its discretion to waive business rates, but following a change of leadership was now only giving business rate relief where it was required to by law.

The only option that seemed viable was to reconstitute as a registered charity, but as the beneficiary rules at the time were more restrictive, it was decided to recruit a board of outsiders to run the newly formed trust.

This arrangement soon created a conflict over who ‘owned’ the organisation. There seemed to be two options – either get some agreement between the collective and the trustees so that the conflict was minimised – or change the structure to one that could be charitable and would enable the artists to govern the organisation. At the time the most likely option seemed to be a charitable Industrial and Provident Society (IPS) – though there would still have been some difficulties an ISP would not be a registered charity (regulated by the Charity Commission) so there would still be amply scope for disagreements with the local authority. The other problem with this approach was cost as conversion to an ISP at the time was costly. Another approach was to amend the Trust deed to allow some artists onto the committee, but as we found out it is much harder to amend a constitution in this way. It would have been much easier to have specified this in the first place – but once the constitution is registered then changes like this are hard to make.

This situation occurred a few years ago. Since then both the legislation and the Charity Commission have moved on considerably. Now the Commission would see the artists, not as members of a collective, but as ‘users’ and as such would almost certainly be happy with at least a third of the committee being made up of artist ‘users’. With such a strong voice on the committee it seems likely that such major disagreements between the artists and the rest of the board could be largely avoided.  The Charity Commission will register organisations where the board is made up of all users – but the negotiations may be protracted and they may require additional safeguards in the constitution.

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One Response to “What Happens When an Arts Collective Needs Business Rates Relief on Premises”

  1. govstories says:

    Another option might be to set up a separate body that could get charity registration to take on the lease of the building (qualifying for rate relief) and then let the building to the artists at subsidized rates. Its a bit more complicated and there are still plenty of opportunities for misunderstandings and conflict if the new entity is not close to the artists.

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