TPA Briefing Note: Empty Property Rates

March 20, 2011 12:10 AM

In April the holiday period for Empty Property Rates relief comes to an end. Soon nearly all businesses will have to pay full business rates on an empty commercial property just three months after it becomes vacant, and six months later for an industrial property. This comes at a time when the Government needs to do all it can to help businesses lead the recovery.

The TPA believes that the Government should scrap the tax in this month’s Budget.

Click here to see the full report


Click here to read the press release


Key points:

  • Empty Property Rates will hinder a private-sector led economic recovery. Last year, empty rate relief was worth £1.2 billion to businesses.



  • With high vacancy rates across the UK, many landlords may simply to choose to demolish empty properties instead of paying the new rates. This would contract the fixed capital stock and make recovery more difficult.



  • Pensioners who are funding their retirement with rental income from a small number of commercial properties will also be hit despite receiving no income from empty properties.



  • Collecting Empty Property Rates also causes councils problems, with increased administrative and collection costs. And some are using taxpayers’ money to destroy buildings to avoid paying the tax themselves.



  • In opposition, senior Liberal Democrat and Conservatives were highly critical of the tax.


John O'Connell, Research Director of The TaxPayers' Alliance, said:
“It’s crucial that businesses are allowed to get on with driving an economic recovery, but hiking tax on empty properties threatens to scupper many firms' ability to grow. A huge number of properties lying vacant run the risk of simply being demolished to avoid the burden, making it far more difficult for businesses to start up or relocate and making a mess of towns across the country. Senior figures in the Government were critical of the policy before the election and we keep hearing how they want to take on the enemies of enterprise – they can do this at the Budget on Wednesday by getting rid of this stealth tax.”
In April the holiday period for Empty Property Rates relief comes to an end. Soon nearly all businesses will have to pay full business rates on an empty commercial property just three months after it becomes vacant, and six months later for an industrial property. This comes at a time when the Government needs to do all it can to help businesses lead the recovery.

The TPA believes that the Government should scrap the tax in this month’s Budget.

Click here to see the full report


Click here to read the press release


Key points:

  • Empty Property Rates will hinder a private-sector led economic recovery. Last year, empty rate relief was worth £1.2 billion to businesses.



  • With high vacancy rates across the UK, many landlords may simply to choose to demolish empty properties instead of paying the new rates. This would contract the fixed capital stock and make recovery more difficult.



  • Pensioners who are funding their retirement with rental income from a small number of commercial properties will also be hit despite receiving no income from empty properties.



  • Collecting Empty Property Rates also causes councils problems, with increased administrative and collection costs. And some are using taxpayers’ money to destroy buildings to avoid paying the tax themselves.



  • In opposition, senior Liberal Democrat and Conservatives were highly critical of the tax.


John O'Connell, Research Director of The TaxPayers' Alliance, said:
“It’s crucial that businesses are allowed to get on with driving an economic recovery, but hiking tax on empty properties threatens to scupper many firms' ability to grow. A huge number of properties lying vacant run the risk of simply being demolished to avoid the burden, making it far more difficult for businesses to start up or relocate and making a mess of towns across the country. Senior figures in the Government were critical of the policy before the election and we keep hearing how they want to take on the enemies of enterprise – they can do this at the Budget on Wednesday by getting rid of this stealth tax.”

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