The council has secured more than £48,000 after winning a High Court battle on Tuesday.
A test case ruling saw Milton Keynes Council win its case against the Public Safety Charitable Trust.
Charities are entitled to 80 per cent relief from business rates, but the council claimed PSCT wasn’t actually using its premises wholly for charitable purposes.
This rate relief is passed on to landlords. The PSCT tried to take advantage of this by offering to occupy premises in return for a ‘reverse premium’ – a payment made as an inducement to enter into a transaction – based on the money landlords would save.
The charity had been installing Bluetooth boxes in the buildings which sent out charitable or public safety messages. The council argued this meant they were not materially present in the builing and, therefore, were not using it wholly for charitable purposes.
Council finance boss, Edith Bald, said: “In our opinion this scheme was a cynical avoidance strategy, which was not only immoral, but has now also been proved to be illegal.”
In total PSCT will have to pay the council £48,875, as well as more than £25,000 in costs as a result of the ruling.