Are you still paying empty rates?

The government handed out more than £1bn in empty property relief last year (2010) as clever avoidance tactics employed by the industry started to take their toll.

Figures from the Department for Communities and Local Government show the government missed out on £631m of empty property rates in 2009-10. The figures reveal that it awarded £1.1bn in relief last year, a 56% increase on the £487m concession a year earlier. A spokesman for CLG said the rise was due to the government's decision to raise the rate relief threshold temporarily from £2,200 to £15,000. However, the industry has disregarded that claim on the back of the fact that 2010 Valuation Office Agency figures show that the average rateable value of non-domestic property in England and Wales was £32,200.

A major contributor to the rise in relief was the industry's use of tactics to avoid paying the tax. These tactics included intermittent occupation, whereby a tenant occupies a building for six weeks, enabling a six-month, rate-free period. If the occupier can make some use of the building for six weeks, they can claim a fresh rate-free period. There is no end to the number of times that can happen. A whole industry has sprung up around what they call the 42-day rule - more and more companies are saying we will occupy your building for just 42 days and then take a part of the saving that the landlord will achieve from the empty rate relief.

Between 2005 and 2008, empty property rate relief cost Whitehall roughly £1.3bn pa. Ministers then scrapped the relief, which cost the property industry £800m.

However, these latest figures show that the government is back to handing out near pre-recession levels of relief.

Don't miss out on your opportunity to avoid this tax, speak to dohertybaines today on how this can be avoided. dohertybaines are working with a number of occupiers who will occupy your premises and make use of the 42-day rule. Giving you up to 6 months empty rates relief on vacation.

For further information, contact Fiona Kelly.

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