Skip to content

TAXReliefCheckComing.com

You are here: Home arrow Tax Relief Checkarrow Empty Rates Relief is Not Working

Empty Rates Relief is Not Working
E-mail
Written by James D. Crawford   
Thursday, 22 December 2011
Whether you believe it should stay or go, one thing is clear: the government's policy on empty rates relief isn't working.

Between 2005 and 2008, relief cost the Treasury more than ?1bn a year. The year after it was scrapped, this industry's bill leapt to ?800m.

New figures from the Communities and Local Government department show that the government's empty property relief bill for the year to March 2011 was?1.1bn (p52). Last year's bill was similar, so not the blip that was claimed at the time. Relief, it's clear, is back to pre-recession levels.

At the time it was scrapped ministers argued it would encourage vacant shops, offices and industrial buildings back into use. Critics said it would compound the financial misery of landlords already dealing with the loss of rental income and a sluggish market.

It turns out neither argument quite rang true. The industry has made clever use of avoidance tactics, saving itself a significant bill. Ministers might choose to argue that the tax has been successful as these properties have been brought back into use. The truth is that in most cases this has only been on a temporary basis.

The British Property Federation wants the charge scrapped and has argued cogently why it should be. However, ministers are seldom for turning, as the debate over the 50p tax band shows.

What's needed is a proper, pragmatic discussion about the future of empty rates. If a tax achieves no societal goals, angers those on who it is levied, and costs more than it raises, then what is its purpose?

* The Estates Gazette/UK Regeneration campaign Building a Better Britain is gathering momentum. Offers of support continue to roll in and tangible action is already visible. This week a business tasked with helping breathe life back into Ireland's "ghost estates" is preparing to bring the project to the UK.

Equity Share Partnership is in talks to take over two vacant residential developments in Liverpool to turn them into family homes. Its scheme works through it buying the unfinished estates and taking on apprentices and unemployed workers to complete them.

Apprentices will continue to claim unemployment assistance, but will be given training. Other workers will also claim benefits but, in return for their labour, will receive an equity stake in one of the properties they have worked on, or the option to rent now and buy later.

Should the Liverpool project be a success, it will be expanded. Through our campaign we hope to help bring forward other projects like it.
Last Updated ( Thursday, 22 December 2011 )