I blogged a couple of weeks ago about the removal of Empty Rate relief for commercial property. It has been a bit of a disaster for some of our clients.
But the property industry is a pretty resilient place and much smarter, it seems than the Government. Although it is not always possible to avoid paying the Rates, the position can often be ‘mitigated’. And the industry seems to have out-foxed the Government. In the latest figures from the Office for National Statistics (ONS) the Government has failed to save the millions of pounds it had hoped by scrapping the Empty Rates relief. In fact they awarded more in relief in 2010 than they did in the preceding two years.
This is despite the fact that there are now 269,000 vacant commercial properties in the UK – amounting to 16% of the total stock.
So how do you avoid the Rates? Well, it’s easy really! We find people who want temporary occupation of property and are prepared to do deals. They move in for 6 weeks and then move to another property. The 6 months relief starts again after 6 weeks occupation…
It doesn’t work for everyone, but we have a number of properties where we can do this. And it seems that it is working!
I am sure that the loophole will be closed when these clever folks running the country hear the penny drop. But bear in mind that the Tories in opposition said they would scrap the charge, only then to change it a few weeks before the election.
Yes another example of an ill-thought through piece of legislation?