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BA: 'end charity bookshop concessions'
11.11.11 | Charlotte Williams
The Booksellers Association is calling for the end of tax and business rate concessions for charity bookshops, saying that they represent "unfair competition" to high street booksellers. The call comes amid claims publishers are being approached directly by charity shops for stock.
A spokesperson for the Charity Retail Association said 261 specialist charity bookshops were currently open in the UK and Ireland, and that an estimated 8,000 of the 9,450 charity shops in the UK sell books in some capacity.
Leading charity book retailer Oxfam made close to £20m profit in 2010 from its books sales. With over 130 second-hand specialist second-hand bookshops in the UK, it sells in the region of 12 million books a year, including book sales in its non-book second-hand outlets. Most of the 700+ Oxfam shops sell books.
BA chief executive Tim Godfray said it was unfair that high street booksellers should face additional competition, especially during such difficult economic times.
He said: "Trading conditions for high street retail booksellers are extremely tough in the current climate and unfair competition from charity bookshops is something our members do not need. If we are serious about protecting retail diversity on the high street, we need to review the strong tax and rate concessions given to charities that run shops."
Godfray asked: "If a charity shop sells new goods, why should it benefit from tax and business rate reductions?"
The Booksellers Association said its stance followed "strong concern from high-street booksellers", with one charity believed to have more outlets in the UK selling books than the largest speciality bookshop.
BA members had reported that The Healthy Planet, a new charity bookshop in Shepherd's Bush, west London, was now approaching publishers for stock. Godfray said: "BA members think that The Healthy Planet has strayed from its stated goal of dealing in genuinely unwanted titles and is now competing with booksellers on the high street."
However, Healthy Planet founder Shaylesh Patel denied the claim, saying its stock came from other charity shops and online dealers, such as those offering stock to the "Used" books section on Amazon. A one-off book supply from Octopus had come at the publisher's instigation, he added. But Patel said: "We'd love to [approach publishers]. We're looking to do more and more with publishers."
Charity shops are exempt from corporation tax,and have zero-rated Value Added Tax on the sale of donated goods, plus an 80% relief on mandatory non-domestic business rates. They are frequently manned by volunteers.
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I suspect that the "rating" law differentiates between "donated" and "purchased" new goods ; if my memory is correct, a charity shop would not be able to claim their 80% business rate relief in circumstances where they derived over 50% of their shop income from new goods purchased direct by the charity.
Oxfam and the like, boast of their business success. It's about time they were treated as bona fide businesses.
As usual Clive is right below are the notes on Business rate relief from the House of Commons Library, Surely It is not beyond the abilities of Tim Godfray and his team to check this out, also this article indicates only one charity shop is involved in approaching publisher if that is true they will only be wasting there time and our money approaching Government.
Local authorities are required to give 80% rates relief on any property which is occupied by a charity and is wholly or mainly used for charitable purposes [Local Government Act 1988, section 43.] The authority has the discretion to extend rates relief for charities to 100% under section 47 of the 1988 Act. Most of the discretionary ‘top up’ has to be funded by the authority itself.
In order to qualify for rates relief, a charity shop must fulfil the following conditions:-
•
It must be wholly or mainly used for the sale of goods donated to a charity; and
•
The proceeds of sale of the goods (after any deduction of expenses) must be applied for the purpose of a charity.
[1988 Act, section 64(10)]1
The first condition is designed to restrict relief to shops predominantly selling second hand goods. It is not intended that shops owned by charities which are to all intents and purposes trading commercially should be eligible for rates relief.
The phrase ‘wholly or mainly’ is not defined in the legislation and there is apparently no case law in terms of rating legislation to clarify the matter. Guidance from the Department for Communities and Local Government states that, in other circumstances, ‘mainly’ has been held to mean ‘more than half’.2 The guidance further notes that billing authorities take some or all of the following factors into account in determining whether a shop is ‘wholly or mainly’ used for selling donated goods:
I. The percentage of floor space occupied by donated goods;
II. The percentage of turnover and profit represented by sale of donated goods;
III. The percentage of individual items sold which are donated goods.
Sometimes, use of the above factors is still unable to resolve the issue of whether or not a charity shop is eligible for rate relief. Such an assessment may not be straightforward because, for example, the majority of items on display in a shop might be donated goods but, in terms of value, the donated goods represent a smaller proportion of turnover. Where the position is not clear, the authority is advised to take into account the weight given to charitable and non-charitable uses of the hereditament (i.e. rateable premises).
Recent annual surveys of charity shops conducted by the magazine Charity Finance have found that, in a typical charity shop, some 87% of goods are donated.
Wonder what impact this might have on the BA's biggest specialist group, Christian Booksellers? Most of them operate on a charitable basis, many run by volunteers...
Christian bookshops will suffer if the rate relief disappears and may themselves disappear. Secularists wouldn't complain about this but Christians would and they are still a large proportion of the popuation. As would staff and suppliers as most Christian shops stock a large proportion of new goods.
Oxfam are the third largest retail bookseller in the U.K. and have a powerful chain of pure bookselling retail outlets plus a website.All branches are computerised with trained volunteers .
In short they are a very popular and effective bookseller serving the community.They currently sell almost 100% used books.
It is a bit chicken and egg, but as indies close they open and are often the only bookseller in the town/area.
In short the BA are far too late in launching this initiative as such shops are totally established in the public's mind ,and are expanding in number every month. To remove tax breaks etc now , will only result in less money going to essential charitable causes. The time to influence commercial behaviour of Oxfam was about 5 years ago, now it just seems petty .
It also pisses the supermarkets off, maybe they initiated this ? .
Though I support the idea that actually all involved in retailing should face the same costs, I'm slightly amazed at Mr Godfray - after all in regards to Healthy Planet he was the one rather supporting such things only earlier this year, regardless of new or old stock they were still trading on the basis of Charity Relief and it was still a case that 'unfair competition from charity bookshops is something our members do not need.'
As to approaching publishers - well even when Mr Godfray was lauding them they clearly stated they were hoping to get books from publishers who would otherwise pulp them!
I suppose this change of heart really is to do with the drop of 25% of the BA's indie subscribers - many of whom are not dead and gone just not paying subs anymore and perhaps some of whom voted with their feet based on such statements as Mr Godfrays earlier in the year.
Dear man, some of us may in time return to the fold but it won't be based on such actions of these i'm afraid.
I wonder if I might correct this inaccurate comment and, once again, defend the Booksellers Association from ill-founded criticism. This is, in fact, only the latest salvo in a long-running campaign by the BA against the over-generous business rating concessions extended to charity shops. Tim Godfray will confirm that I raised this matter on the BA Council more than ten years ago, when I realised that nine charity shops were selling secondhand books in a street where I owned an independent bookshop. The BA then raised the matter with the British Retail Consortium and the Department of Trade. Indeed, I was interviewed on the subject on the Radio 4 Today programme in 2001. An Oxfam representative also defended their position in the same slot. If little progress has been made it is not the fault of the BA, who have continued to raise the subject since then. The government were deaf to the problem for fear of upsetting the many charities (and their supporters) who benefit from the concessions. Despite the attrition on the high street, I suspect this will continue to be the case, even if Mary Portas takes up her cudgels as was recently reported. It is too hot a potato for politicians of any hue. It is not merely competition from charity shops which affects independent shops; charity shops, with largely free stock, volunteer staffing and rating concessions, are able to afford the highest rents in secondary shopping streets, thus raising rental levels for other commercial shops. On the rates front, the charity concessions are, in effect, being paid by their commercial neighbours. There is an ironic codicil to my story. I closed down the bookshop in question in 2008 and the freehold was bought by a property investor. After standing empty for 18 months it was finally let - as another charity shop, and one with a large secondhand books section since you ask.
While we are considering the future for B&M bookshops perhaps we could have an update from the Bookseller on any response to Tim's letter to the British Library regarding the link to Amazon on the BL's site as previously reported - perhaps I missed something or of course perhaps we all simply moved on...?
I can't see Oxfam changing their 99.9% of used books v new product anytime soon,so given Martin's comments above, I think nothing will happen over the next ten years either.
I think it is probably the consumers of the BA's service ,now or in the past ,who will decide if criticism of them is ill founded or not .
Martin why is any criticism about the BA ill-founded, Do we not have rights as members of the BA to voice our concerns and criticism's or do we like sheep just follow the Council and Tim's lead. Does not the demise of so many true Independents mean anything, As we all know the ending of the independent bookseller has been caused by the ending of the Net Book Agreement and since then the rise of the Supermarkets and Amazon in discounting books at one end of the market and the Publishers at the other end buying at terms never offered to independents the School and College business. In both these scenarios the BA has been mainly silent
At the risk of disturbing some sensibilities I for one think that Mary Portas,herself, has already done more than enough damage to the high street.
Mary Portas fuelled the powerhouse commercialism of the charity shops with her TV series ; "little old lady" helpers have been faced with increasing edicts from management (in many cases leaving), the charity MBA's have run amok, "staffing" is often nowadays partially via "social services" or the unemployed who have been "advised" that recent charity shop work experience will boost their CV and give them greater opportunity of long term paid employment.
Martin, I totally agree that the charity shops have driven shop rentals upwards ; in many instances charities have been paying a premium rental to get prime sites - no greater offender here than Oxfam ((especially over the last 15 years). Secondary sites were all that some of the smaller charities could afford ; however, along the way in the boom days of the noughties short-sighted estate agents and lazy landlords quick saw the advantages of assured income from the charities.
(If Michael Moon of Whitehaven reads TheBookseller we could well have a lively debate.)
Roddy, please read my contribution again. I did not say that any criticism about the BA is ill-founded, merely that I was defending it from criticism which is, in the opinion which I too am free to express, ill-founded. Just to put the record straight, it really is a denial of trade history to suggest that the BA has been 'quiet' about any of the issues you list. The BA fought tirelessly to save the NBA and after its abolition to persuade publishers to be more supportive of independents, but even at the time I recognised that the BA is a service and support network, not some panacea to cure the ills of market forces.
Nowadays a visit to an Oxfam bookshop holds the promise of an unexpected find and is often an exciting experience. The public are tired of the chains trying to sell yet another Katie Price ghost written yarn or an over-priced Jamie Oliver. Bookshops should be vibrant and friendly, not the stale and unadventurous places they have become.
Hear, hear
@mavis rimmel
I can't help wondering just how many commercial independent bookshops - be they new or secondhand - you have visited in the last 12 months.
There are hundreds of well stocked exciting indies where you will find a very broad selection of front and backlist titles : many secondhand stockists would offer far better value and range than most charity outlets - including Oxfam's much vaunted specialist bookshops !!
My above response was made to a comment which seems to have vapourised. !!!!!
Yes Clive, anything negative about the BA and they take you out to the yard , strap you to a post, blindfold you, the Council load rifles , aim ,and that's that.
Let me just say, I think the BA are great and I agree totally with their supermarkets strategy.
Bang!
You missed.!
I suspect that the "rating" law differentiates between "donated" and "purchased" new goods ; if my memory is correct, a charity shop would not be able to claim their 80% business rate relief in circumstances where they derived over 50% of their shop income from new goods purchased direct by the charity.
As usual Clive is right below are the notes on Business rate relief from the House of Commons Library, Surely It is not beyond the abilities of Tim Godfray and his team to check this out, also this article indicates only one charity shop is involved in approaching publisher if that is true they will only be wasting there time and our money approaching Government.
Local authorities are required to give 80% rates relief on any property which is occupied by a charity and is wholly or mainly used for charitable purposes [Local Government Act 1988, section 43.] The authority has the discretion to extend rates relief for charities to 100% under section 47 of the 1988 Act. Most of the discretionary ‘top up’ has to be funded by the authority itself.
In order to qualify for rates relief, a charity shop must fulfil the following conditions:-
•
It must be wholly or mainly used for the sale of goods donated to a charity; and
•
The proceeds of sale of the goods (after any deduction of expenses) must be applied for the purpose of a charity.
[1988 Act, section 64(10)]1
The first condition is designed to restrict relief to shops predominantly selling second hand goods. It is not intended that shops owned by charities which are to all intents and purposes trading commercially should be eligible for rates relief.
The phrase ‘wholly or mainly’ is not defined in the legislation and there is apparently no case law in terms of rating legislation to clarify the matter. Guidance from the Department for Communities and Local Government states that, in other circumstances, ‘mainly’ has been held to mean ‘more than half’.2 The guidance further notes that billing authorities take some or all of the following factors into account in determining whether a shop is ‘wholly or mainly’ used for selling donated goods:
I. The percentage of floor space occupied by donated goods;
II. The percentage of turnover and profit represented by sale of donated goods;
III. The percentage of individual items sold which are donated goods.
Sometimes, use of the above factors is still unable to resolve the issue of whether or not a charity shop is eligible for rate relief. Such an assessment may not be straightforward because, for example, the majority of items on display in a shop might be donated goods but, in terms of value, the donated goods represent a smaller proportion of turnover. Where the position is not clear, the authority is advised to take into account the weight given to charitable and non-charitable uses of the hereditament (i.e. rateable premises).
Recent annual surveys of charity shops conducted by the magazine Charity Finance have found that, in a typical charity shop, some 87% of goods are donated.
Oxfam and the like, boast of their business success. It's about time they were treated as bona fide businesses.
Wonder what impact this might have on the BA's biggest specialist group, Christian Booksellers? Most of them operate on a charitable basis, many run by volunteers...
Christian bookshops will suffer if the rate relief disappears and may themselves disappear. Secularists wouldn't complain about this but Christians would and they are still a large proportion of the popuation. As would staff and suppliers as most Christian shops stock a large proportion of new goods.
Oxfam are the third largest retail bookseller in the U.K. and have a powerful chain of pure bookselling retail outlets plus a website.All branches are computerised with trained volunteers .
In short they are a very popular and effective bookseller serving the community.They currently sell almost 100% used books.
It is a bit chicken and egg, but as indies close they open and are often the only bookseller in the town/area.
In short the BA are far too late in launching this initiative as such shops are totally established in the public's mind ,and are expanding in number every month. To remove tax breaks etc now , will only result in less money going to essential charitable causes. The time to influence commercial behaviour of Oxfam was about 5 years ago, now it just seems petty .
It also pisses the supermarkets off, maybe they initiated this ? .
I wonder if I might correct this inaccurate comment and, once again, defend the Booksellers Association from ill-founded criticism. This is, in fact, only the latest salvo in a long-running campaign by the BA against the over-generous business rating concessions extended to charity shops. Tim Godfray will confirm that I raised this matter on the BA Council more than ten years ago, when I realised that nine charity shops were selling secondhand books in a street where I owned an independent bookshop. The BA then raised the matter with the British Retail Consortium and the Department of Trade. Indeed, I was interviewed on the subject on the Radio 4 Today programme in 2001. An Oxfam representative also defended their position in the same slot. If little progress has been made it is not the fault of the BA, who have continued to raise the subject since then. The government were deaf to the problem for fear of upsetting the many charities (and their supporters) who benefit from the concessions. Despite the attrition on the high street, I suspect this will continue to be the case, even if Mary Portas takes up her cudgels as was recently reported. It is too hot a potato for politicians of any hue. It is not merely competition from charity shops which affects independent shops; charity shops, with largely free stock, volunteer staffing and rating concessions, are able to afford the highest rents in secondary shopping streets, thus raising rental levels for other commercial shops. On the rates front, the charity concessions are, in effect, being paid by their commercial neighbours. There is an ironic codicil to my story. I closed down the bookshop in question in 2008 and the freehold was bought by a property investor. After standing empty for 18 months it was finally let - as another charity shop, and one with a large secondhand books section since you ask.
Martin why is any criticism about the BA ill-founded, Do we not have rights as members of the BA to voice our concerns and criticism's or do we like sheep just follow the Council and Tim's lead. Does not the demise of so many true Independents mean anything, As we all know the ending of the independent bookseller has been caused by the ending of the Net Book Agreement and since then the rise of the Supermarkets and Amazon in discounting books at one end of the market and the Publishers at the other end buying at terms never offered to independents the School and College business. In both these scenarios the BA has been mainly silent
Roddy, please read my contribution again. I did not say that any criticism about the BA is ill-founded, merely that I was defending it from criticism which is, in the opinion which I too am free to express, ill-founded. Just to put the record straight, it really is a denial of trade history to suggest that the BA has been 'quiet' about any of the issues you list. The BA fought tirelessly to save the NBA and after its abolition to persuade publishers to be more supportive of independents, but even at the time I recognised that the BA is a service and support network, not some panacea to cure the ills of market forces.
At the risk of disturbing some sensibilities I for one think that Mary Portas,herself, has already done more than enough damage to the high street.
Mary Portas fuelled the powerhouse commercialism of the charity shops with her TV series ; "little old lady" helpers have been faced with increasing edicts from management (in many cases leaving), the charity MBA's have run amok, "staffing" is often nowadays partially via "social services" or the unemployed who have been "advised" that recent charity shop work experience will boost their CV and give them greater opportunity of long term paid employment.
Martin, I totally agree that the charity shops have driven shop rentals upwards ; in many instances charities have been paying a premium rental to get prime sites - no greater offender here than Oxfam ((especially over the last 15 years). Secondary sites were all that some of the smaller charities could afford ; however, along the way in the boom days of the noughties short-sighted estate agents and lazy landlords quick saw the advantages of assured income from the charities.
(If Michael Moon of Whitehaven reads TheBookseller we could well have a lively debate.)
Though I support the idea that actually all involved in retailing should face the same costs, I'm slightly amazed at Mr Godfray - after all in regards to Healthy Planet he was the one rather supporting such things only earlier this year, regardless of new or old stock they were still trading on the basis of Charity Relief and it was still a case that 'unfair competition from charity bookshops is something our members do not need.'
As to approaching publishers - well even when Mr Godfray was lauding them they clearly stated they were hoping to get books from publishers who would otherwise pulp them!
I suppose this change of heart really is to do with the drop of 25% of the BA's indie subscribers - many of whom are not dead and gone just not paying subs anymore and perhaps some of whom voted with their feet based on such statements as Mr Godfrays earlier in the year.
Dear man, some of us may in time return to the fold but it won't be based on such actions of these i'm afraid.
While we are considering the future for B&M bookshops perhaps we could have an update from the Bookseller on any response to Tim's letter to the British Library regarding the link to Amazon on the BL's site as previously reported - perhaps I missed something or of course perhaps we all simply moved on...?
Peter, we are keen to bring you an update when we can but the BA is not currently releasing further details.
I can't see Oxfam changing their 99.9% of used books v new product anytime soon,so given Martin's comments above, I think nothing will happen over the next ten years either.
I think it is probably the consumers of the BA's service ,now or in the past ,who will decide if criticism of them is ill founded or not .
Nowadays a visit to an Oxfam bookshop holds the promise of an unexpected find and is often an exciting experience. The public are tired of the chains trying to sell yet another Katie Price ghost written yarn or an over-priced Jamie Oliver. Bookshops should be vibrant and friendly, not the stale and unadventurous places they have become.
Hear, hear
@mavis rimmel
I can't help wondering just how many commercial independent bookshops - be they new or secondhand - you have visited in the last 12 months.
There are hundreds of well stocked exciting indies where you will find a very broad selection of front and backlist titles : many secondhand stockists would offer far better value and range than most charity outlets - including Oxfam's much vaunted specialist bookshops !!
My above response was made to a comment which seems to have vapourised. !!!!!
Yes Clive, anything negative about the BA and they take you out to the yard , strap you to a post, blindfold you, the Council load rifles , aim ,and that's that.
Let me just say, I think the BA are great and I agree totally with their supermarkets strategy.
Bang!
It is back up now Clive and Julian. No idea why it was put down as unsuitable: it wasn't even about the BA.
I hear voices too.
You missed.!
My somewhat disparaging remark above was to reflect upon the sameness of the chain bookseller with their uniformity of stock throughout the land rather than the many excellent indies. However with the cost of petrol and the distance involved in tracking down a good independent shop it can be rather expensive in these austere times. To vaporise my comment so swiftly after it had been logged when it was made in good faith and reflects honestly my own personal view was an overreaction I feel.
It is about time someone raised the issue of unfair competition from charity shops. we are an independent bookshop and now have 4 charity shops within a few hundred yards all selling books. They pay no rates whatsoever - the council gives an extra 20% relief on top of the mandatory 80%, they only pay the manager of the shop - everyone else is a volunteer, they do not pay for their book stock and they get tax concessions as well. one sells books (all types) at 3 for a pound. How on earth do we compete with that?
Having worked for a while in the charity bookselling sector, I can see both sides of the argument. On the one hand, the charity industry is a retailer's dream: low rent shops, largely manned by volunteers, with stock that costs next to nothing. And when you see the senior charity execs turning up in BMWs and Mercs, you realise what a gravy train the whole thing is.
But the fact remains that they're still raising serious amounts of money for charities and that's better than another donation to Messrs Tesco or Bezos. Also, as a book buyer, I like the more eclectic selection that charity shops offer - a refreshing alternative to the bland, predictable range of many bookshops.
However, I don't want to see booksellers driven out of business (or authors deprived of royalties) and I would like to see greater visibilty about how the charity sector works, including the generous salary packages offered to executives. Whenever anyone challenges the issue of pay, the same old cliches are trotted out: these people could earn a lot more in the private sector and the skills they bring more than justify the salary.
I'm not convinced.
The fact is, if you donate a book to a charity shop, it will probably end up generating an income for individuals and organisations that sometimes have a tenuous relationship with the good cause. The public need to be aware of this.
Dear Bookseller,
I have enjoyed over 46 years in the world of bookselling, be it WHS, Sherratt & Hughes, Waterstones, Borders and, I confess, for the past 11 years as a Charity Bookshop manager.
May I take this opportunity to offer my view.
The UK book market is worth somewhere around £3b and sells 300m book per annum, it is now shrinking under the effects of recession and e technology.
Oxfam book sales are about £20m pa [less than 1%of uk marketplace] from around 600 shops and probably raises about £5m in 'profit' to help fund its work to find solutions to poverty and suffering in the world [and that includes the UK]
All Charities get rate relief but pay a commercial rent and other costs when occupying a shop. Volunteers are a low cost staffing solution - but they are volunteers - charities provide work experience, community service placements and keep many of the older generation off the streets and away from an ASBO!
Should the BA campaign to end this relief on rates then all charities will suffer, whilst the majority of people may not face insomnia if the Donkey Sanctuary or the Cats Home lose funds perhaps we all may if, when faced with a diagnosis of Cancer, the Cancer Charity runs out of funds that would find a cure or the Hospice is unable to fund a bed so that you can die quietly, peacefully and painlessly.
Beware of what you wish for!
If Charity Bookshops are growing in number and success then ending Rate relief will not result in fewer of them or less books sold - any Charity shop manager worth their salt will work to increase the shop income to minimise any loss - like any retailer 'that's the job'. They may well improve the offer, broaden the range and be better bookshops.
Beware of what you wish for.
Tim Godfrey and the BA should consider from where comes the stock for Charity shops?
The answer - the wonderful British public donate it in bag fulls [together with Clothes, Toys, Bric a brac, CDs, DVDs etc]
The bookshelves of the British Public are full, and so is their spare bedroom, loft, attic, garage - wherever they can store the books given away as BOGOFs, 3 for 2s, 4 for 3s or 70%, 50% 25% off offers that publishers have funded together with Booksellers during the past 20 years of rash, crazy, self indulgent price led marketing.
The books will go somewhere, the public do not like destroying books, particularly if some charitable cause may benefit. So if it ain't a Charity shop it will be the jumble sale, Church fete, car boot sale or ebay - they will find a home at the expense of a new bookseller. The vast quantities you sold and continue to be available secondhand will not disappear because the industry takes a pop at Oxfam
The BA and the wider world of booksellers brought this glut of books down upon their own heads when the industry walked away from the NBA.
Beware of what you wished for.
The belief that cut price books would give Dillons et al the chance to sell massive quantities of extra books was mistaken. People have limited time to read, after all we have to eat, sleep, work, wash, dig the garden; although I suppose we could abstain from 'rumpy pumpy' and go to bed with a Trollope! Be it Joanna, Anthony or even his mother!
The growth of Supermarkets, Amazon and now the ebook - much more influential than Oxfam - will surely sound the death knoll of a great number of bookshop.
If we want bookshops and if protectionism could work perhaps we should consider a return to the NBA.
The vast majority of books in print do not sell in large number and could be subject to a 'net price'. For those titles that the industry or sales volume indicate should be open to discounting then 'de-net' them AND at that time remove the spurious 'publishers recommended price' that is used in so many misleading Christmas adverts!
Waterstone's is returning to range and stopped 3 for 2s, it's a start - 'net books' may discourage the browse in Waterstone's and buy from Amazon syndrome.
Time for a wider and more thoughtful debate - but the clock is ticking.
Does the nation want bookshops?
P.R.Jennens