Swift reaction to the end of empty rates relief
Communities Minister Bob Neill yesterday announced a drastic reduction in the empty rates relief for small properties, saying that it would cost the government an estimated £400m per year to continue with the exemption.
Vacant properties with a rateable value of under £18,000 a year are currently exempt from business rates. But Mr. Neill yesterday said that the threshold would be cut to just £2,600 from 1 April 2011, Property Week reports.
The British Property Federation chief executive Liz Peace said this was a “damaging and retrograde step” that would risk harming the government’s aim of a private-sector-led economic recovery. “Empty rates is a tax on hardship at the worst possible time. The majority of the properties affected by this announcement will be in areas that are already economically disadvantaged, and so this will be a further blow,” she added.
Having to pay business rates on empty properties has led in the past to millions of square feet of property being demolished, she noted. The BPF said the requirement had also often forced small businesses to cut jobs instead of downsizing property, and had discouraged vital development and regeneration schemes.
The BPF also pointed out that the previous government had said that the relief would cost £135m in 2010-2011, suggesting that the amount of empty rates paid on the lowest-value properties had trebled in one year. The cost of the relief in 2009-2010 was £185m, it noted.
Liz Peace added: “If these figures are to be believed then it suggests that small businesses have been hit much harder by the recession than first thought, and that the need for relief to help the private sector thrive is greater than ever. On the other hand, the wide range of estimates that successive ministers have used could simply mean that government has no idea what the impact of today’s announcement will be, which in some ways is even more concerning.”
