Reducing the cost of vacant property

Empty business property is expensive. Leave it empty for too long, and the billing authority will charge you full business rates. It’s all due to the Empty Rates legislation. However, there is an answer: our GN Empty Rates service, which could bring savings of over 65% to your business.

Since April 2008, properties are exempt from business rates for three months from the date they become empty. Industrial properties are exempt for six months. Following these exemption periods, businesses must pay full business rates.

How the service can help

The GN Empty Rates service is lawful, thorough, and tailored to your specific situation. Our experts will find a valid use of your space, satisfying the billing authority that the property is occupied and helping ensure you receive reduced rates. We’ll take care of everything, from reviewing your property and managing products to liaising with your local authority.

The current legal position - Empty Rates

The Courts have confirmed that companies can lawfully engage in strategies to reduce the tax liability for empty rates. To find out more about the latest case law, please check this page regularly.
The key cases to date are as follows:-

  • Makro Properties Ltd v Nuneaton and Bedworth District Council 2012

Confirmed that there is no de minimus rule to be applied to the occupation but the occupation must be beneficial

  • Preston City Council v Oyster Angel Charity 2012

Confirmed that when next in use by a charity for charitable purposes means when next in use by any charity and does not require re-occupation by the same charity

  • Public Safety Charitable Trust v Milton Keynes Council and others 2013

Confirmed that the use of Bluetooth transmission broadcasting charitable messages did not constitute on the facts that the premises were occupied wholly or mainly for charitable purposes

  • Sunderland City Council v Stirling Investment Properties LLP 2013

Confirmed that Bluetooth transmission did on the facts constitute rateable occupation

The current legal position - Empty Buildings in Disrepair

Recent case law decisions have made the opportunity to reduce the rates due on such vacant commercial property more difficult.

  • Keith Newbigin (VOA) v S J & J Monk 2015

Overturned The Upper Chambers decision and confirmed that where premises were undergoing re-construction the economic repair test requires the essential services and other building elements to be in situ. In other words their replacement (following removal) falls within the definition of repair, and the premises could not be valued on the assumption that the premises were devoid of such facilities.

  • Pall Mall Investments (London) Ltd v Gloucester City Council 2014

Confirmed that the meaning of occupation being ‘prohibited in law’ did not include buildings that were in a poor state of repair and where occupation would be in breach of current Health & Safety standards

So what options remain to mitigate business rates charges on empty buildings in dis-repair?

Some question marks arise following the Pall Mall cases, on whether the presence of asbestos is sufficient to gain the advantage that occupation of the property is prohibited in law. Soft stripping is still an option to seek a £0 Rateable Value, but careful advice is now required following S J & J Monk that the estimated costs of repair fall outside of the economic repair test. For buildings in poor repair advice is again required to advise on the likely costs of bring the building back into repair.

GN can provide such advice or alternatively discuss empty rates mitigation through deployment of 6 week occupation schemes to create new void periods.

The Government's Tax avoidance Discussion Paper 2014

The Government still sees many of these schemes as tax avoidance despite the Courts considering that where rateable occupation has been demonstrated to exist, such occupation is lawful. It introduced a Discussion Paper on what it sees as tax avoidance in December 2014 and following closure to responses on 28 February 2015, is now considering matters further.

Let’s talk

Whether you have empty properties or buildings in a poor state of disrepair, now’s the time to talk to Goodman Nash. Even if you’ve tried reducing rates before and want to vary your approach, we can deliver a solution for your situation, so please contact us today.
Refunding one-off business rates overpayments to your organisation.
Uncovering and refunding business rates overpayments across your property portfolio.
Examining your property spending and securing refunds for your business.
Helping minimise your business rates if you’re upsizing or downsizing your premises.
Helping Appeal your business rates.