Labour’s Equality Bill will give tax breaks to Scientologists
The Conservative Party has spotted that the equality laws being championed by Harriet Harman will force councils to exempt the Church of Scientology from council tax and business rates. A detailed investigation into the small print of Ms Harman’s new Equality Bill establishes that the Church of Scientology will receive the same tax breaks that the Church of England and other organised religions currently receive.
And Cranmer saw this coming two years ago.
Places of worship are eligible for a complete exemption from business rates and Ministers of Religion are entitled to a series of significant discounts or exemptions from council tax. Following a Court of Appeal test case in 1970 after a legal challenge by the Church of Scientology of California , premises of Scientologists are refused from being considered as a place of worship. This is since their views are deemed to be a ‘philosophical belief’ rather than a worship of a deity.
However, the Equality Bill defines as a ‘protected’ characteristic “any religious or philosophical belief”. The Bill adds to 2003 equality regulations that have already resulted in an employment tribunal ruling that a worker’s views on climate change were a ‘protected philosophical belief’ – a ruling upheld by the courts last week. The Bill imposes a duty that will require all public authorities not to discriminate on these grounds of religion/belief, with the Bill noting that this extends to “revenue raising and collection”. A further new ‘public sector equality duty’ will require all public authorities actively to ‘eliminate conduct’ which may involve discrimination against any philosophical belief and to ‘advance equality’ of those who have philosophical beliefs.
In practice, the combination of these definitions and duties will shoot down the 1970 Court of Appeal ruling. Public authorities will have to treat the likes of Church of Scientology on a par with the Church of England. The Church of Scientology will qualify for 100 per cent exemption from business rates on its premises which are accessible to the public (parts of premises only used for private ‘auditing’ would not be exempt). Residential housing used by Scientologist ‘chaplains’ would be exempt from council tax (or just pay one small bill for a whole complex, saving significant sums). Scientology HQ in Saint Hill Manor, East Grinstead , alone pays £100,000 a year in business rates.
The Church of Scientology has been described in Parliament by Conservatives as “an evil cult founded by an individual purely in the interests of enriching himself and sustained by those who are either wicked or wayward” (Hansard, 31 January 2006, col. 231).
Bob Neill, Shadow Minister for Local Government, said: “The public will be alarmed that Harriet Harman is planning to give local tax breaks to Scientologists. Struggling families and local firms will object to Scientology being able to avoid council tax and business rates, whilst their bills have gone through the roof.
“Tolerance and freedom of expression are important British values, but this does not mean that the likes of Scientology deserve special tax treatment. Like Labour’s so-called Human Rights Act, Harman’s new law threatens to have a series of unintended and unpalatable consequences.”
The current situation on tax breaks for religion include:
Business rates -
Churches and places of worship are 100% exempt from business rates (this is not linked to being a charity, which only gives a partial business rates reduction).
In addition, religious properties receive some council tax exemptions:
Council tax Class H exemption: Unoccupied dwellings, awaiting occupation by a minister of religion.
100% Council tax exemption -
Council tax Class B exemption: Religious communities
A so-called ‘Discount disregard’ – the residents are not counted for the purposes of council tax (e.g. like students), but the owner may be liable for one single council tax bill. Yet this will be significantly less than paying lots of multiple council tax bills, and represents a significant tax break.
Council tax Class E exemption: Occupied by minister of religion.
The owner is liable, not the resident:
“A dwelling inhabited by a minister of any religious denomination, is expressed as a class of property in respect of which liability falls upon the owner, so long as the dwelling is used as a minister’s residence and as a place from which the minister performs the duties of his office”.
Scientologists are not currently eligible for local tax breaks
At present, a premises only qualifies as a ‘place of religious worship’ business rates exemption if it meets certain criteria on worshipping God or a deity. Those which only practice a ‘philosophy’ do not meet these criteria.
“Robert Neill: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 3 June 2009, Official Report, column 591W, on non-domestic rates: religious buildings, for which faith communities and religions the Valuation Office Agency has determined that their premises, where used for public religious worship, may be eligible for exemption from non-domestic rating.
Barbara Follett: Places of Public Religious Worship which belong to the Church of England and Church in Wales and all other religions certified under the Places of Worship Registration Act 1855 where there is an open invitation to the public to attend services are exempt from NNDR under the Local Government Finance Act 1988. The exemption does not extend to organisations which practice a philosophy or where the invitation and access is restricted to certain members of the congregation” (Hansard, 28 October 2009, col. 473W).
“Mr. Stewart Jackson: To ask the Secretary of State for Communities and Local Government pursuant to the answer to the hon. Member for Bromley and Chislehurst of 3 June 2009, Official Report, column 591W, on non-domestic rates: religious buildings, what criteria the Registrar General uses when determining whether to certify the premises of a faith community or religion as a place of religious worship.
Meg Hillier: I have been asked to reply. The Places of Worship Registration Act 1855 provides for places of meeting for religious worship to be certified to the Registrar General but does not apply to the established Church. When considering the registration of a building which has been certified as a place of religious worship, the Registrar General applies the judgment by the Court of Appeal in the Segerdal case. The main finding in the judgment is that the words ‘place of meeting for religious worship’ in the Act connote a place of which the principal use is for people to come together as a congregation to worship God or do reverence to a deity. Apart from the Church of England and the Church in Wales , any faith or denomination which meets these criteria would be capable of recognition under the 1855 Act” (Hansard, 26 October 2009, col. 147W).
The Church of Scientology is not currently eligible for tax breaks.
“Robert Neill: To ask the Secretary of State for Communities and Local Government pursuant to the answer to my hon. Friend the Member for Peterborough (Mr. Jackson) of 7 May 2009, Official Report, column 382W, on the Church of Scientology, what (a) criteria and (b) methodology the Valuation Office Agency uses to determine whether a faith community is deemed to be eligible for a place of worship business rate exemption.
John Healey: Schedule 5 para. 11(1) to the Local Government Act 1988 provides the criteria for exemption from non-domestic rating for places of public religious worship. Premises occupied by a faith community will be exempt providing:
- It is a place of religious worship
- The worship is public
- The premises are certified as a place of religious worship by the Registrar General or belong to the Church of England or the Church in Wales .
Valuation officers’ methodology is to follow the above criteria” (Hansard, 1 June 2009, col. 49W).
“Robert Neill: To ask the Chancellor of the Exchequer pursuant to the answer to the hon. Member for Peterborough (Mr. Jackson) of 7 May 2009, Official Report, column 382W, on the Church of Scientology , whether the Valuation Office Agency recognises venues of the Church of Scientology as places of public worship eligible for an exemption from non-domestic rates.
Mr. Timms: It is for the Valuation Officers of the Valuation Office Agency to decide whether any hereditament is a place of public religious worship which is exempt from non-domestic rates in accordance with Paragraph 11 of Schedule 5 of the Local Government Finance Act 1988. In general, following an Appeal Court decision in 1970, Valuation Officers do not regard premises occupied by the Church of Scientology as being so exempt” (Hansard, 1 June 2009, col. 49W).
The tax inspectors’ manual explains:
“2.1 Paragraph 11(1)(a) sets out a series of requirements which need to be satisfied for exemption to apply.
2.2 ‘ A Place of Religious Worship’ - (Test 2)
The words ‘a place of religious worship’ are to be taken as meaning places to which people come to do reverence to or for the veneration of God (not only a Christian God):-
‘worship …which must have some at least of the following characteristics: submission to the object worshipped, veneration of the object, praise, thanksgiving, prayer and intercession’ See R -v- Register General ex parte Segerdal and Church of Scientology of California 1970/RA/439.
A belief in the spirit of man or simply, a ceremony of instruction or discussion of a philosophy is not religious worship.”
Valuation Office Agency, Rating Manual - Volume 4 - Section 8 - Part B, Churches, Church and Chapel Halls and Similar Buildings.
The 1970 Court of Appeal ruling noted:
697 Regina v Registrar General, Ex parte Segerdal and Another Court of Appeal, 7 July 1970
“The acting chaplain of a building in Sussex known as a chapel of the Church of Scientology applied to the Registrar General for registration of the building certified by him as a place of meeting for religious worship under the Places of Worship Registration Act, 1855. The Registrar General made inquiries into the nature of the services, ceremonies and other proceedings for which the building was used and in the course of a long exchange of correspondence was supplied with two booklets, one of which set out, inter alia, the form of ceremony for the naming of children, marriages and funerals, and the creed, and stated that in a Scientology church service ‘we do not use prayers, attitudes of piety, or threats of damnation’ but the facts and truths ‘as discovered in the science of Scientology.’ The creed made reference to ‘God’ but stress was laid on the perfectibility of man as a spiritual and immortal being by application of the tenets of Scientology. The Registrar General refused to register the building under the Act. The chaplain and the Church of Scientology of California applied to the High Court for an order of mandamus directed to the Registrar General to register the building certified to him under the Act of 1855; and an affidavit sworn by the chaplain set out the facts as to the form of regular Sunday service, referred to the creeds as prayers, stated the nature of the sermons delivered, and deposed that the purpose of the services and ceremonies and the existence of the chapel was to the best of his understanding and belief religious worship in every sense of the word. The court refused the order of mandamus.
On appeal by the applicants:-
Held, dismissing the appeal,
(1) that unless a place certified to the Registrar General under the Act of 1855 was in truth a place of meeting for religious worship he had no jurisdiction to register it and accordingly was entitled to make such inquiries as he thought fit to satisfy himself that it was at the relevant time such a place; a fortiori where his refusal to register a particular place could be challenged in the High Court on an application for an order of mandamus and the court could itself decide on the evidence whether or not the place was one for meeting for religious worship.
(2) That a place of meeting for religious worship connoted a place where people came together to do reverence with prayer, humility and thanksgiving to a Supreme Being; and as on the evidence the services and ceremonies carried on in the building contained none of those elements but consisted in instruction in the tenets of a philosophy concerned with man and not with worship of a deity the building did not qualify for registration under the Act of 1855.”
Rulings on council tax exemptions would be a matter for local authorities rather than the Valuation Office Agency; yet they too would be influenced by the Court of Appeal ruling precedent.
“Mr. Stewart Jackson: To ask the Secretary of State for Communities and Local Government pursuant to the answer to the hon. Member for Bromley and Chislehurst (Robert Neill) of 31 March 2009, Official Report, column 1047W, on the Church of Scientology, whether the Church of Scientology is recognised as a religion for the purposes of (a) council tax exemption Class H and (b) business rate exemptions.
John Healey: It is for individual local authorities to decide whether Class H exemption from council tax applies in any case. The Department does not have information about those decisions as they relate to the Church of Scientology . It is for the valuation officers of the Valuation Office Agency to decide whether any hereditament is a place of public religious worship which is exempt from non-domestic rates in accordance with Paragraph 11 of Schedule 5 of the Local Government Finance Act 1988” (Hansard, 7 May 2009, col. 382W).
A list of Scientology’s “churches” may be found here.
Based on the Rateable Values on the Valuation Office Agency’s at www.voa.gov.uk, their HQ at Saint Hill Manor in East Grinstead pays £98,213 in business rates in 2009-10.
The effect of Harman’s Equality Law:
Harriet Harman’s new law will blow this precedent out of the water. The Equality Bill defines “religion” and belief as any “philosophical belief”. This is in stark contrast to the tests of believing in a God or deity in the 1970 Court of Appeal ruling.
“10 Religion or belief
(1) Religion means any religion and a reference to religion includes a reference to a lack of religion.
(2) Belief means any religious or philosophical belief and a reference to belief includes a reference to a lack of belief.
(3) In relation to the protected characteristic of religion or belief—
(a) a reference to a person who has a particular protected characteristic is a reference to a person of a particular religion or belief;
(b) a reference to persons who share a protected characteristic is a reference to persons who are of the same religion or belief” (Equality Bill, Part 2: Protected Characteristics).
The Equality Bill builds on the Employment Equality (Religion or Belief) Regulations 2003. Under those rules, there has already been a test case (Nicholson v Grainger Plc) where an employment tribunal ruled that an individual's views on climate change were a “protected philosophical belief”. Legal experts have noted: “This test means that this area of the law may create an abundance of litigation in the future as the tribunals will have to weigh an individual’s beliefs against the yardstick of current popular thinking. This will make this area of law a potential minefield for employers” (New Law Journal, 29 July 2009).
This ruling has recently being upheld by an Employment Appeal Tribunal (BBC News Online, 3 November 2009).
The Equality Bill goes on to impose duties on public authorities not to discriminate on grounds of religion. The Bill’s Explanatory Notes explicitly state that this includes revenue raising functions.
“110.It also makes it unlawful to discriminate against, harass or victimise a person when exercising a public function which does not involve the provision of a service. Examples of such public functions include law enforcement and revenue raising and collection” (Explanatory notes to Clause 27 of the Equality Bill).
There is also a brand new ‘public sector equality duty’ that explicitly requires public bodies to take steps to ‘advance equality’ and ‘eliminate conduct’ which may compromise the protected characteristic of religion. This is a new duty that does not currently exist.
“466. This clause imposes a duty, known as the public sector equality duty, on the public authorities listed in Schedule 19 to have due regard to three specified matters when exercising their functions. The three matters are: (a) eliminating conduct that is prohibited by the Bill… (b) advancing equality of opportunity between people who share a protected characteristic and people who do not share it…
“472. There are no equivalent public sector equality duties for age, religion or belief or sexual orientation in current legislation. The clause extends the new public sector equality duty to cover gender reassignment in full, age, religion or belief and sexual orientation” (Explanatory notes to Clause 143 of the Equality Bill).
These cumulative effect of these new laws will be to annul the 1970 Court of Appeal ruling, and impose active duties on local councils and the Valuation Office Agency not to discriminate against the Church of Scientology and to ensure they receive the same treatment as other religions, faiths and beliefs. The Church of Scientology will be put a part with the Church of England and other organised religions. Councils and the tax inspectors will have a legal duty to ensure that they receive the same tax breaks as any other place of religious worship which is open to the public.
On the Church of Scientology:
Conservative MP, Michael Gove, has told Parliament: “I regard Scientology as an evil cult founded by an individual purely in the interests of enriching himself and sustained by those who are either wicked or wayward” (Hansard, 31 January 2006, col. 231).
The Charity Commission ruled in 1999 that the Church of Scientology was not eligible for charitable status since it did not have a public benefit. They argued:
“The Commissioners also noted CoS’s submission that the activities of auditing and training constitute its worship, this argument being supported by the expert opinion submitted by CoS. However, the Commissioners were unable to accept that the practices of auditing and training were akin to or comparable with the acts of worship indicated by the English cases – praise, veneration, prayer, thanksgiving, intercession, submission to the object worshipped” (Decision of the Charity Commissioners, Application for Registration as a Charity by the Church of Scientology, 17 November 1999).
Such a ruling could also be overturned by the Equality Bill, given the new public sector equality duty and placing any belief on a par with religion.
In 2006, despite the ruling of the Charity Commission, the Corporation of London unilaterally made a bizarre ruling that the Church could be considered as having charitable status for the purpose of its business rates bill in that part of London. Yet this only provided an 80% reduction, not the 100% that it would receive a place of religious worship. Such a ruling has not been copied by other councils (Daily Telegraph, 10 December 2006).
In 2000, the Inland Revenue ruled the Church of Scientology was a not-for-profit body and therefore exempt from VAT. However, this has no bearing on its eligibility for business and council tax exemptions (Daily Telegraph, 11 August 2006).
Cranmer awaits with interest to see if the same tax breaks being granted to the Church of the Jedi.