UK Government urges councils
to stop giving tax breaks to Scientology
October 15, 2010
The government is urging councils across the country to stop giving hundreds of thousands of pounds in tax breaks to the Church of Scientology.
The communities secretary, Eric Pickles, said a majority of the public did not want the "controversial organisation" to be given the kind of favourable treatment usually reserved for charities and questioned this use of public money.
The church, which is not classed as a religion by the Charity Commission, was described as a cult by a high court judge in 1984.
It is the first time a cabinet minister has intervened in the long-running row over the tax breaks for Scientology.
At least four authorities have given tax breaks to the group, which counts a host of celebrities among its high-profile members.
City of London Corporation has asked it to pay only one-fifth of the usual rates on its London headquarters, near St Paul's cathedral. As a result, it has saved £1.3m worth of tax.
The six-storey building was opened in a lavish ceremony attended by the leading Scientologist Tom Cruise in 2006.
The corporation decided Scientology could be classed as a charity either for the advancement of religion "or other purposes beneficial to the community".
The council says it feared the organisation would take it to court were the tax breaks to cease.
Conservative-controlled Westminster council has granted 80% rates relief on Scientology's Celebrity Centre in Bayswater, London, saving £165,303 over the past 10 years.
The council has defined the organisation as a "non-registered charity" that is "beneficial to the community". The Scientologists moved out this property, set up for prominent people in the arts, in July, council officials said.
In Birmingham, the city council has given the Church of Scientology Religious Education College 80% discretionary relief, awarded because the property is being used as an educational institution, and in Sunderland, the council has given Scientology £30,000 of rates relief on its city centre base over five years.
In a statement to the Guardian, Pickles said he could not see why Scientology was being given privileged treatment by councils.
"Tolerance and freedom of expression are important British values, but this does not mean that the likes of Church of Scientology deserve favoured tax treatment over and above other business premises," he said.
"The Church of Scientology is not a registered charity, since the Charity Commission has ruled that it does not provide a public benefit. Nor are its premises a recognised place of worship.
"Councils may award charitable relief. They should take into consideration the Charity Commission's rulings when weighing up whether to do so.
"I do not believe the majority of the public would want their own council to be giving special tax breaks to such a controversial organisation."
According to the official Scientology website, the group has at least nine other centres in Britain. The Valuation Office Agency, the agency of Revenue and Customs that assesses business rate valuations, does not regard the Church of Scientology as a recognised religion.
The Charity Commission ruled, in 1999, that the church did not pass the "public benefit" test required for advancing religion as a charitable purpose.
Scientology has won some victories to gain tax-free or low-tax status. In 2000, it persuaded Revenue & Customs that it should be exempt from VAT on payments received because its services were educational and non-profitable.
In a test case before the VAT tribunal, the Scientologists' lawyers forced the taxman to return £8m in overpaid VAT.
The organisation denies it is a cult and claims its subsidiary groups have done successful work with schools and in prisons to combat drug abuse and other social problems.
A spokesman said Pickles' comment appeared to refer to an old decision by the Charity Commission before new guidelines were issued.
"Scientology is very popular with those who have visited our churches, met with Scientologists and observed or utilised our numerous community activities that effectively address drug abuse, illiteracy, declining moral values, human rights violations, criminality and more," he said.
"Local council authorities, government bodies in this country and many others, and the European court of human rights have all recognised the religious nature of Scientology or the fact that Scientologists are actively helping those in their communities as a direct reflection of their religious beliefs."
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