0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Business Rates Relief for Empty Units ‘Costing Taxpayers £1bn a Year’

Written by: Keith Tully

Published: 16th January 2020

Empty showroomThe government’s policy of offering business rates relief to owners of empty commercial properties is depriving taxpayers of around £1 billion a year.

That’s according to the BBC’s Shared Data Unit, whose analysis shows that local councils are losing out on millions of pounds in many cases because landlords who own business premises get given rates relief after their properties are vacated.

With so many shops being closed down on high streets across the country in recent years, local authorities are being left out of pocket on a sizeable scale as a result of the rates relief system.

Many different business bodies have been calling on the government to overhaul its business rates system of late, typically because they feel it makes life unfairly difficult for retailers and other high street operators.

For example, the British Retail Consortium (BRC) has been calling for a business rates rethink for years, insisting that the current system harshly impacts its members.

The BRC’s chief executive Helen Dickinson recently said that she considers it essential for the government to review and reform its “broken business rates system”.

But while high street operators are often struggling to deal with the financial pressures involved in paying their business rates, local authorities are also seeing their incomes diminished if enterprises in their area are forced to close.

Reflecting on some of these issues, Richard Watts from the Local Government Association said in a statement: “Business rates are an extremely important source of income for local government and with an overall funding gap of £8 billion by 2025, the government must commit to moving forward with vital reforms.”

Those reforms should, he said, “include addressing business rates avoidance and the impact of reliefs, such as empty premises relief”.

A spokesperson for the Treasury said: “Empty property relief strikes a balance between incentivising property owners to put vacant properties to use, while not penalising those who lose a tenant at short notice.

“Whilst the rate of business rates collection varies between individual authorities, the local government finance system has been designed so that business rates income is redistributed across the country according to the needs of local areas.

“We will announce further details of the business rates review in due course.”

Keith Tully

Author
Keith Tully
Partner

Join Keith Tully on Linked In Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
Processing...
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Desling with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
77
Number of UK Offices
30000
Directors Helped
70+
Licensed Insolvency Practitioners