Asda is demolishing one of its former call centres to avoid empty property rates.

The supermarket chain had planned to get consent for a£100 million redevelopment of the 6-acre site in New Barnet, Hertfordshire, but will instead knock down the building because it faces an empty property tax bill amounting to thousands of pounds.

From April 1, empty property has been liable for full business rates after three to six months of being vacant. Office and shop owners previously had 50 per cent relief and industrial owners were exempt.

Asda head of property communications and planning Jonathan Refoy said: “The cost of regeneration has increased considerably with the empty building on this brownfield site. It impacts on the deliverability.

“Just as things have become more difficult economically, the Government has imposed an ill-timed tax on empty properties, which has a number of unintended consequences and can only hinder retailers’ ability to regenerate brownfield sites.”

British Property Federation director for investment Peter Cosmetatos said: “Any short-term gain for the Exchequer will be wiped out by regeneration projects being shelved, firms being driven out of business and usable buildings being demolished.”