The Valuation Office is charging Ledbury Town Council some £1,525 a year extra in rates, to take into account the office space that is currently used by the Ledbury Poetry Festival.
The offices are used free of charge by the festival as the town council's contribution to the event.
The offices, which belong to the town council, were once used by Ledbury Council for Voluntary Services and, until now, had been included in the total rateable value of the town council Offices.
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