A reappraised controversy has emerged regarding a tax loophole that has enabled huge landowners to exempt themselves from business rates by converting disused buildings into places of worship, resulting in a loss of revenue to local authorities. An investigation found that the scheme, affiliated with an entity named Faithful Global, is offering prayer spaces, but a majority of the properties have no religious activity visible. In UK law, businesses are exempt from paying business rates if the property is being used for religious worship. Faithful Global, claiming to be an interfaith project, has more than 300 properties throughout the UK – including former pubs, office buildings, and other properties – available for worship, as per records. However, it has been found that many of the locations are either inaccessible or in a dilapidated condition, thus raising questions about their actual use. A legal case in Bradford showed that the properties associated with Faithful Global were part of a corporate structure intended to take advantage of the tax loophole. Now, councils such as Dover are fighting back against the landlords in court, with one action concerning a life sciences hub where 60 units were transformed into faith spaces, which may have enabled the landlords to exclude business rates from over £1 million. The Schreiber family, one of the UK’s largest property owners, seem to be the primary owners of the scheme. Their holdings include shopping centres, office blocks, and former pubs across the UK, many of which are on Faithful Global’s website. While the family claims that what they are doing is legal, the councils claim that the scheme is mainly for tax avoidance. As councils face funding shortages, the City of London Corporation and other authorities are attempting to shut the tax loophole, so that business rates go towards vital public services.
Tax Loophole Allows Landlords to Avoid Millions in Business
