In complete contrast to Business Secretary, Lord Mandelson's spin, suggesting that the contentious empty rates legislation is good news for tenants and small businesses, there is a concerted effort from the property industry, including the RICS and British Property Federation in the run up to the pre-budget report to get this tax repealed.

There are now 5 petitions running on the Number 10 Downing Street website calling for the empty property rates tax to be abolished, including one launched by the Conservatives. To add to the political pressure, over 120 MP's have signed an early day motion calling for the reinstatement of empty property rates relief. The Welsh Assembly Government is also lobbying for scrapping empty rates after a study showing the £30 million to £50 million a year income is far outweighed by the damage to regeneration and its economy.

Andrew Kilpatrick of Thompsons said, “Whilst one can understand the Government's enthusiasm to hang on to this tax, particularly in circumstances where they are looking to fund increased public spending to buy us out of a recession, this is at the expense of long term damage to the country's economy as the tax provides a massive disincentive for new development and will have profound long term effects. Whether the Government can be persuaded to look beyond the short term may be questionable, particularly when there is a general election to win in the not too distant future. However, the introduction of this new tax could not have come at worse time for the property industry, hit by the credit crunch and reverberations from the resultant funding difficulties.

In a further call to the Government to help businesses struggling with the recession, an RICS spokesman on business rates is asking the Government to consider changing the process for calculating next year's Uniform Business Rate, which is normally increased in line with Retail Price Index increase in the preceding September. This showed a 5% increase, which would increase the current Uniform Business Rate from 46.2 pence to the pound up to £48.5 pence to the pound from next April. However, with that expected to be the inflation peak and with significant decreases in the Retail Price Index expected before April, the Government could view September's figure as a spike and fix a lower figure.

Andrew Kilpatrick of Thompsons says, “With many businesses struggling to keep costs down in the face of static or falling trade, the last thing most of them need is an extra 5% increase in their rates bill, whether for occupied property or empty property.”

 Back to News Archive