A28 Rooms to let

Hiring out your church premises

First published on this website in February 2012 and last updated in January 2024

Synopsis

Here is detailed advice on how to go about letting your church buildings out for others to use. There are nine sections which cover

• Clarify purpose and vision
• Assess the spaces available
• Identify your target users
• Fix the pricing structure
• Take advice on legal details
• Beware potential problems
• Serve professionally
• Set up management and staffing
• Market your product

Possible purposes suggested are generating income, serving the community, enabling Christian outreach and sharing your facilities.

Under spaces to be assessed are room space, parking space, reception space, storage space, kitchen space, loos and noise and access issues.

Target users are classified in terms of longer-term bookings, mainly daytime customers and evening/weekend customers.

And so on through the other sections.

This article will be invaluable for any church letting out its premises for the first time or reviewing or extending its present level of lettings.

I've never had so many comments back after publishing an article as for this one.  Here are extracts from a few.  I have tried to take all the points raised into later revisions of the article.

"On the business side there may also be implications for VAT threshold, and for rates. These are complex areas ... church buildings are rates free, but once you are trading then I understand they could be potentially liable for rates being applied proportionally? Re VAT all trading contributes to turnover to be checked against VAT threshold unless it's zero rated. Room hire per se is zero rated, but if chargeable services are added then they contribute to assessable turnover."

"There is an elephant in the room called VAT that isn't really addressed. We have just completed the construction of new church building and zero rated the construction on the basis that the building will be used for a relevant charitable purpose.

I am concerned that the use of a building for more than 5% for non-charitable purposes could result in a liability for VAT on the whole or a significant proportion of the construction cost. This would be the case for the first 10 years under the capital goods scheme. HMRC guidance does not tell you how to calculate the 5% but puts the onus on the charity to come up with a just and reasonable basis (unlike the previous rules which specified how the 10% could be calculated).

We have been advised to avoid letting to top-down business operations eg franchised ventures and focus on community use."

"One minor tweak I would suggest - pg6 - when bookings are back to back then please don't overlap one group's set up with another's packing away. I have seen arguments and resentments start here because both parties felt pressured. Also remember that the last bit of clearing is usually hoovering up, and this can't be done effectively if someone else is getting things out. And it's never fun starting off in a biscuit-crummy room!"

"One thing not mentioned is the range of licences that need to be considered - a video licence is needed for for any form of film discussion group, if CDs are played (at preschool, Sunday school, youth group etc) then a PPL licence is needed and a PRS licence. If you have concerts in church/hall then PRS is needed. The CCLI people supply most of these, but we have discovered this year that because our church hall is in a different building to the church - same curtilage, but separate buildings - they cannot give us a PRS for the hall, that now comes direct from PRS (now PRS and PPL are joint licences provided by PRS) at much greater cost! There is also a limit of 6 concerts a year for the church PRS - any more and again we would have to go direct to PRS."

The article was updated in January 2024 with minor amendments.