Dispute over business rates exemption and gym provider reaches Supreme Court

The issue in London Borough of Merton Council (Appellant) v Nuffield Health Ltd (Respondent) concerns section 43(6)(a) of the Local Government Finance Act 1988, which provides for a mandatory 80% relief from non-domestic rates on premises which are occupied by a charity and used wholly or mainly for charitable purposes.

The Supreme Court is asked to decide whether Nuffield Health is entitled to this mandatory relief in respect of its occupation of premises at Merton Abbey.

Nuffield Health is a registered charity established “to advance, promote, and maintain health and health care of all descriptions and to prevent, relieve and cure sickness and ill health of any kind, all for the public benefit.”

Among other things, it runs 112 fitness and wellbeing centres, including Merton Abbey. The facilities at Merton Abbey are primarily available to fee-paying Nuffield Health Gym members.

Nuffield Health acquired Merton Abbey on 1 August 2016, when it bought the business of Virgin Active. It applied to the London Borough of Merton for mandatory and discretionary rate relief.

The application for mandatory relief was granted initially. However, following a visit by council officers in November 2016, the London Borough of Merton withdrew the relief on the basis that Merton Abbey was not being wholly or mainly used for charitable purposes.

The High Court found in Nuffield Health’s favour, holding that the charity is and, at all times since 1 August 2016, has been entitled to mandatory relief from non-domestic rates in respect of Merton Abbey.

In Nuffield Health v London Borough of Merton [2021] EWCA Civ 826 the Court of Appeal – by a majority – dismissed the London Borough of Merton’s appeal. The London Borough of Merton appealed to the Supreme Court.

A Supreme Court panel comprising Lord Briggs, Lord Kitchin, Lord Sales, Lord Hamblen and Lord Leggatt is due to hear the case on 7-8 March.