Huge relief as government announces charities with income under £200k to be exempt from water charges
A lifeline has been thrown to Scottish charities after the government announced groups earning under £200k will now be exempt from water and sewerage charges.
It means over 19,000 of Scotland’s 23,500 charities will qualify - as well as hundreds of amateur sports clubs - easing a huge financial burden on the sector.
Deputy first minister Nicola Sturgeon made the announcement this week following a public consultation, signaling the end to the current complicated system which only allows charities earning under £75k annually to apply for exemption.
Last year, TFN revealed small charities were being hit with thousands of pounds worth of bills for historic charges by Business Stream - the commercial arm of Scottish Water - some of them dating back six years.
The situation arose when, in 2008, water rates were separated from local business rates.
Eligible charities had to apply for exemption but suddenly last year many started receiving backdated demands from Business Stream.
Many said they hadn't been made aware of the need to apply for exeemption since the changes took place.
Now the government has stepped in with a package of concessions to help most small charities and amateur sports groups with measures which include a 50% discount for charities earning between £200,000-£300,000 and a two year graduated transition for charities not eligible for exemption.
It must be simple for charities and not involve lots of further eligibility checks, which simply increases costs and bureaucracy for charities - Ruchir Shah
Sturgeon said: “Following much consideration I believe the new scheme addresses many of the issues identified in the current one – in particular the qualification dates and the income threshold.
“It simplifies administration and provides reassurance to those funding the scheme by making eligibility subject to the income as declared to the Office of the Scottish Charity Regulator.”
Sturgeon said the new scheme will start from April 2015 with £2m government cash, shored up with £4.5m from Scottish Water.
Drumchapel Women’s Aid, which has been working with women affected by domestic abuse for 21 years, was initially hit with a £21,000 bill by Business Stream after an admin error.
After readjustments it was left with £9,000 to pay, which the firm said represented the charges between the account being opened and the exemption being accepted.
After a 17-month battle the bill has been scrapped.
The charity's Sandra Welch said: "We are a charity, every penny of funding we get goes to women and children.
"If we paid the bill it would have taken away funding from them.
"We are delighted. Now we can get on with our real jobs."
Ruchir Shah, policy manager for SCVO, said: “We welcome the significant increase in the exemption threshold from £75,000-200,000 and the move to ease the current complicated system.
“However, as we await further details of the new scheme, we urge that it must be simple for charities and not involve lots of further eligibility checks, which simply increases costs and bureaucracy for charities and the scheme administrators.”
Charlene Wallace, Business Stream's director of customer opperations, said: “We’ve been listening to our customers and have represented their views throughout the government’s consultation process so that any changes made to the exemption scheme were clear, transparent and fair.
“The changes will provide clarity over which organisations pay water bills, which do not, and which are eligible for an exemption or a discount.
“We will continue to help customers which wish to apply for the Scottish Government’s scheme and we’ll be working with our customers to make sure they understand the changes and how they’ll be affected. We’ll also be working closely with all relevant organisations to make sure that the amended scheme is implemented properly and make the transition as smooth as possible.”
