Pressure on Government to scrap Empty Property Tax
Lobby groups have increased pressure on the Government to scrap business rates on empty commercial premises, in an attempt to help business landlords struggling with tough economic conditions.
The campaign is being led by the British Property Foundation (BPF), which has called on the Government re–introduce rate relief on empty commercial properties.
Since the law changed on 1 April 2008, landlords have to pay full business rates on empty retail and office property, following a three–month grace period — previously they received 50% tax relief. Industrial properties now have to pay 50% for the first six months, then the total amount.
In an open letter to Prime Minister Gordon Brown, the BPF said the tax was encouraging firms to demolish buildings rather than pay the charge, and that in the current climate, the burden of additional taxation could lead to more businesses going bankrupt.
The Federation of Small Businesses (FSB) added its weight to the campaign and called for the Government to re–introduce relief of up to 50% on the ‘unfair’ tax. FSB national chairman John Wright said:
“There is currently no way out for those who own a building they cannot let or sell. When they need the most help, businesses are being hit with a tax on properties that earn no income. Urgent action is needed in the face of the commercial property market slump.”
The British Chambers of Commerce (BCC) added that the issue was “pressing” for small businesses around the UK, and called the tax a “brake on enterprise”.
“There has been little joined–up thinking on this,” said a BCC spokesman. “The Government originally abolished the relief to encourage regeneration but this is clearly not happening. And at a time when things are already tough enough for the construction industry, the tax is a huge disincentive to investment.”
Responding to the call for rate relief to be re–introduced, an HM Treasury spokesman said the Government was keeping the issue “under review”.