Council left £120k out of pocket after charity claimed business rates relief
A charity which claimed business rates relief left a Suffolk council nearly £120,000 out of pocket when it ceased trading and was dissolved, a report has revealed.
My Community Space (MCS) informed Ipswich Borough Council in July 2016 that it had taken three-year leases for nine spaces at St Clare House in Ipswich, which were formerly occupied by HMRC.
MCS claimed the property had been vacant from the date the lease began, and as a registered charity, the organisation requested rate relief.
The council's business rates team were informed that MCS was in occupation of the spaces, and were holding "exhibitions" - various posters on easels throughout the floors which were otherwise empty.
The council said it was not satisfied that the charity met the criteria to be awarded charitable rate relief and refused the claim.
The council's executive finance papers read: "The 'exhibitions' held appeared to be nothing more than an attempt by the charity to make the properties appear as though they were in use."
MCS disputed the council's decision to refuse the relief and a hearing was held at Suffolk Magistrates' Court on April 18, 2017.
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The court found in the council's favour and MCS then appealed the decision and a hearing was held at the High Court on February 13, 2018.
A High Court Judge upheld the original decision and following discussions, an agreement was reached to clear the outstanding business rates of £148,956.12 by monthly instalments.
However, before the first instalment was made, My Community Space informed the council that they had ceased trading, and eventually the charity was dissolved on July 23 last year.
The council approved the write-off of the £119,562.62 debt at the council's cabinet meeting on Tuesday.
The report added that the authority has reported MCS to the Charity Commission.
Martin Cook, resources portfolio-holder at Ipswich Borough Council, said: "It is regrettable that we have been unable to recover all the money owed to us."
A spokeswoman for the Charity Commission said: "My Community Space was wound up and removed from the register on August 2, 2019."
This newspaper has approached MCS for comment.