Small Businesses face £400m Empty Rates Charge

Empty rates relief for smaller properties have been scrapped in a change that may cost businesses £400m a year.

Communities minister Bob Neill announced that the threshold would drop to £2,600 from 1 April, estimating that to continue with the exemption in the 2011/12 tax year would cost government £400m a year.

Vacant properties with a rateable value of less than £18,000 a year had previously been exempt from paying business rates.

Tom Holloway, Director at Holloway Iliffe & Mitchell said: “The level of empty shops across the UK has risen to an all-time high, according to the latest figures from The Local Data Company and this could have a further impact on the number of new lettings taking place as costs of occupation increase.”

The British Property Federation has cautioned that by putting this cost on to the private sector risks derailing a private sector led recovery.

BPF chief executive, Liz Pearce, said that the plans would damage the private sector recovery.

“The majority of the properties affected by today’s announcement will be in areas that are already economically disadvantaged, and so this will be a further blow.”

Craig Powell, Associate Director from Holloway Iliffe & Mitchell comments: “Many small businesses are already finding times tough due to the severe restriction in business finance available and this will only add to cash flow issues.”