Is there any movement yet on the onerous liability to pay full business rates on empty shops?
Full business rates were introduced on empty commercial properties in April 2008, subject to a three-month holiday when the premises first becomes vacant (or six months for industrial properties).
Industry bodies including the British Retail Consortium and the British Council of Shopping Centres have consistently argued against the policy.
National law firm Hill Dickinson’s head of retail property Pam Jones says: “The charging of full business rates on empty premises has failed to achieve its stated aim of forcing vacant properties back into use. It has simply become a difficult burden on hard-pressed retailers.”
She adds: “Ironically, in many situations it actually prevents vacant properties from coming to market, since the rates liability makes landlords less willing to consider taking surrenders of empty shops, even when an insolvent tenant has stopped paying rent.”
So is there any good news for retailers? “I still hope that things will change,” says Jones. “The Welsh government published its review in June recommending changes and we now have the Government review led by MP Julian Sturdy, who has himself long opposed the current regime.”
Jones also urges retailers to consider their options, adding that many empty rates mitigation schemes have been touted over the past four years, many of dubious legality. However, she adds: “In the recent Makro Properties case, the High Court accepted that the storage of documents in part of a non-trading retail warehouse for at least six weeks was sufficient rateable occupation to enable Makro to claim a further rate-free period when the storage stopped. Nuneaton and Bedworth Borough Council had argued that the occupation of 0.2% of the property was insufficient, but the court disagreed.”
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Retail Surgery: Is there any movement on liability to pay full business rates on empty shops?