Government to Review Empty Property Rates Law

by mycompensation on June 20, 2012

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Jim Loxley is a Director for car accident compensation claims specialist, My Compensation

Information recently uncovered by property publication, Estates Gazette may see the government make empty buildings exempt from business rates. The figures, which were uncovered using the Freedom of Information Act, showed that the government was spending over £50 million every tax year on business rates for its own vacant properties. According to the information obtained, the UK’s local authorities, governmental departments and central government collectively spent £50 million in the last 12 months in business rates. It has been suggested that this figure has the potential to rise to around £70 million.

With this information coming to light, George Osborne, Chancellor of the Exchequer, has requested that Julian Sturdy, Conservative MP work with a group of six other MPs in order to formulate proposals on how the laws could be changed to make empty buildings exempt to business rates. Sturdy spoke with the Estates Gazette about the incident, saying that the Chancellor was extremely helpful and that “All members present will now form a small working group to develop some [empty rates] proposals moving forwards.”

Sturdy went on to say that the change could only be seen as welcome news to anybody who viewed the expenses of empty buildings as damaging to the economy and one more factor which is holding back investment and growth for the economy. At present, business rates for properties will be charged to the occupier or landlord of the majority of commercial premises such as factories, warehouses, shops and offices.

A government department run by HMRC named the Valuation Office is responsible for signing the rateable value for each property. The Estates Gazette has stated that the working group of MPs may propose an extension on rates which could last as long as three years for new developments. In addition to this, a complete exemption from business rates for properties considered to be of low rateable value, such as those occupied by small businesses, may be proposed. Also to be included in the report put together by the focus group is a full impact assessment outlining the burden which empty rates are posing to the property industry and the knock-on effect that has on the wider economy.

The news coincides with a document published by industry body, the British Property Foundation in March this year which demonstrated that the cost of empty property rates in the UK has risen by over 400% overall in the past six years. Industrial property specifically had seen a 900% increase since 2006. More can be found over at Out Law.

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