Few will be surprised to hear that statutory tax exemptions are narrowly interpreted. However, the Church of Scientology’s educational arm successfully argued in a guideline case that most of its London HQ is exempt from business rates.
The Church of Scientology Religious Education College Inc., an Australian-registered charity, occupies the imposing London Church of Scientology in the City of London. The building incorporates a chapel, rooms used for counselling and training in the faith and a number of office spaces. As a mark of respect for Scientology’s revered founder, L. Ron Hubbard, a prominent and comfortably equipped corner office is designated as ‘Mr Hubbard’s office’.
The charity argued that the building falls within exemptions contained in the Local Government Finance Act 1988 which apply to places of public religious worship and certain other premises used in connection with them. Given that the premises were entered in the 2010 rating list as having a rateable value of £810,000, a great deal of money was at stake. Its arguments, however, failed to convince a local authority valuation officer or the Valuation Tribunal for England.
In partially upholding the charity’s appeal against that outcome, the Upper Tribunal (UT) noted that Scientology is an outward-looking and evangelising faith. It is open to outsiders and strangers are not only welcomed but actively invited to participate in Sunday services in the chapel. On that basis, the UT was entirely satisfied that the chapel is exempt from business rates as a place of public religious worship.
The exemption, the UT found, extends to those parts of the building used as offices or for office purposes, although not to Mr Hubbard’s office. Roped off against entry and used in the same manner as a shrine or memorial to the life and work of L. Ron Hubbard, it was clearly not a workspace. The exemption was also available in respect of the refectory and large spaces used for group counselling, classes and seminars, the use of which was no different from that of any church hall.
However, the exemption was not available in respect of the building’s open-plan library, information hall, two film rooms, a classroom and certain other spaces that could not be viewed as offices connected to the use of the chapel. The UT also found that no exemption attached to a separate information centre which serves as a display window for the worldwide religion. Those premises lacked any real connection to a place of public worship.