Member Article

Changes to rate relief inflame businesses

Business groups have reacted angrily to government measures to modernise business rate relief for empty properties. Reforms will mean that empty properties are liable for the full business rate after a rate-free period of three months, or six months for factories and warehouses, as of April 2008.

The government claims the measures will rejuvenate deprived areas and will be encouraging for small businesses. However, the British Retail Consortium (BRC) has launched an attack on the new legislation.

Kevin Hawkins, director general of the BRC, said: “Either the government fundamentally misunderstands the mechanics of the property market or it is trying to hide a bare-faced cash grab behind a regeneration smokescreen. “The logic doesn’t hang together. No one gains by keeping property empty. It’s unoccupied because there isn’t the demand for it at that time and place. Piling on taxes will not conjure up new tenants or drive down rents but it will weaken the prospects for local regeneration and fill the treasury coffers.

The British Chambers of Commerce (BCC) has also called the new measures into question, warning the government that it must consider the unintended costs.

David Frost, director general of the BCC, said: “Whilst we welcome the initiative by the government to bring empty properties back into use they must be prepared to deal with some unintended consequences. As we saw in the 1980s, the last time this was introduced, many owners would prefer to make their buildings uninhabitable than pay rates on them, and we do not want to go back to a time in which office blocks were left unfinished if there were no immediate tenants.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .