London Borough of Merton Council v Nuffield Health [2023] UKSC 18 (07 June 2023)
Citation:London Borough of Merton Council v Nuffield Health [2023] UKSC 18 (07 June 2023)
Rule of thumb:If a gym registers as a charity and provides fitness services for disabled & injured people to help them with their medical recovery/maintenance process, can the gym avoid paying Council Tax due to charity status? Yes, provided they convince the charity commissioners to give them the status and do enough charitable work in their premises to maintain the status.
Background facts:The facts of this case were that this Nuffield Health gym was listed as a charity because it provided charitable services for people with injuries & illnesses to allow them to recuperate. This meant that Nuffield Health was exempt from paying Council Tax on their property, and when Merton Council looked for this from them, they refused to pay it.
Parties argued:Nuffield argued that the charitable purposes was only a minor part of the Nuffield Health business model. Nuffield argued that their use & registration of the land was validated by the Charities Commission and this therefore exempted them from Council Tax.
Court held:The Court upheld the arguments of Nuffield. If a business has a charitable status, and this has not been withdrawn, then they do not have to pay Council Tax, and Councils need to take up complaints of this through the Charities Commission who have the expertise to consider this, with the Charities Commission process to be followed by Local Councils in relation to this.
Ratio-decidendi:
‘Nuffield Health is a registered charity. Its essential purposes (ie what it is there for) include the advancement, promotion and maintenance of health. It fulfils those purposes in numerous hospitals, fitness and health centres and gyms. Those purposes are irrebuttably presumed all to be charitable, in all the places where they are carried on and, viewed overall, to satisfy the public benefit requirement. Nuffield Health plainly uses the Merton Abbey gym for the direct fulfilment of those charitable purposes. This is not a case of incidental activities like those discussed in the Glasgow Corpn or Oxfam cases. On the findings of the Court of Appeal, it does so at Merton Abbey only for those who are not of limited means, in short, and putting it broadly, for the rich but not the poor. But the rich are as much a part of the section of the public benefited by Nuffield Health’s charitable activities as are the poor, and it must be assumed from its registration as a charity and from the fact that it is common ground that the trustees are not in breach of their fiduciary obligations that the poor are not excluded from benefit, on a view of Nuffield Health’s activities in the round, even if they are at the Merton Abbey gym. It follows that Nuffield Health does use the Merton Abbey gym (the relevant hereditament) wholly or mainly for its charitable purposes. Therefore Nuffield Health is entitled to mandatory relief from business rates under section 43(6)’, Lord Briggs at 63-65.
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.