Charities will have to pay a portion of their business rates from April, after councillors approved plans to introduce limited rates.

Medway Council currently offers 100% business rate relief to charities, not for profit organisations and community amateur sports clubs - meaning they pay nothing - but new proposals introduce limited rates.

The council’s cabinet voted yesterday to implement “Option 2” which would see all charities connected with animal welfare, lifestyle (which includes religion, arts and education), heritage and regeneration, forced to pay 20% of their full business rates. The changes will be put in place by April 1, 2017.

Not for profit organisations connected with animal welfare would pay 30% rates, those connected with ‘lifestyle’ would pay 50% rates, and those connected with heritage/regeneration would have their relief cut entirely.

'We are robbing Peter to pay Paul but it has to be done' - Cllr Howard Doe

Cllr Howard Doe said: “We had to strike a balance and we needed to make sure we didn’t drive any essential charities to the wall.

“Charity shops are not all selling the usual second hand stuff. We are robbing Peter to pay Paul but it has to be done. If we don’t take it from this area it has to be taken from somewhere else. This is the lesser of the evils.”

Cllr Rupert Turpin also added that other authorities in Kent had already brought in business rates for charities.

He said: “We don’t want Medway to be known as the place to set up charity shops.”

Cllr Martin Potter added: “We have to recognise the competition that charity shops have to other business in the town centre.”

Cllr Turpin said: “We have prioritised charities that deal with vulnerable adults and disabled. There are many that will not be affected.

“We have a scheme that is proportionate, fair and modest.”

Cllr Turpin added: “Business rate relief for charities will still be more than £8 million a year.

“We hope no charities will be forced out by this measure.”

The council’s current business rate relief to charities current costs them £300,000. The plan would bring down costs to £107,000.

Neville Dack, business development officer for Medway Voluntary Action - which supports voluntary services across Medway - said the rates could take a heavier toll than the council realise.

'There’s a danger they could kill the goose that lays the golden egg' - Neville Dack

“It comes at a time when there’s a perfect storm affecting the VCS (Voluntary and Community Sector),” he said. “We’re looking at reduced funding, there’s increased competition for other funds, and everything’s being commissioned - services used to be grant funded but now they’re competitively commissioned.

“In our office we’ve got the Red Cross, Family Action, MEGAN (Medway Engagement Group and Network), and an accommodation service for the homeless - all of these are going to see increased costs.

“I’ve got every sympathy with the council,” he added. “You’ve got to understand they’ve had huge cuts to their budgets and everything they do is reduced to core priorities.

“It’s hard as it is, but this will make it harder.

“There’s a danger they could kill the goose that lays the golden egg.”

Medway Labour have called in the cabinet’s decision to impose a “charity tax”.

Medway Labour leader Cllr Vince Maple has accused the council of not listening to a consultation on the proposals.

He said: “The thing about consultation is that it becomes a pointless exercise when you do not listen to the people that you ‘consult’ with and that has happened here.

“There is compelling evidence that has been put forward by local organisations, residents and campaigners that a decision to impose a ‘charity tax’ will come at enormous expense to local people, charities and, in the long term, the council who will have to provide support to residents.

“This is a short-sighted decision which, as usual, ignores the arguments which have been out forward. We have collected more data to back up our argument and will put that forward by calling in the decision.”

Cllr Teresa Murray, Medway Labour deputy leader, said: “We are listening to local people and local organisations and we will represent their views by calling the decision in for further scrutiny.”