Empty Property Rates Tax Hits £1.1bn
Tuesday, 16 April, 2013
According to the taxpayers Alliance £1.1 billion was paid out for the period 2011-2012 in Business Rates for properties which were empty -“ an increase of 19% on the previous year.
Since exemptions for empty industrial and commercial properties were abolished at the 2007 Budget, this is the first time that a figure has been released pertaining to the sum collected for empty property rates.
Currently, full business rates are due on all empty commercial and industrial properties aside from limited reliefs and a short exemption period. This tax has affected many landlords due to the poor economic climate in which it has become increasingly difficult to find landlords. According to some sources, a few landlords have resorted to demolishing properties rather than paying the full rates while they search for tenants.
Pensioners who bought commercial properties as a way of adding to their retirement income are currently facing economic hardship as they are having to pay large bill for these rates.
Vince Cable, the Business Secretary, said that the tax was counterproductive and economically very damaging. Similarly the Education Secretary described the abolition of empty property rate relief as an ungodly act. Alan Duncan, the DflD minister noted that removing the tax relief was counterintuitive to improving the economic situation since taxing something that does not generate revenue causes considerable economic damage. However, given the opposition to the abolition from senior government officials -“ the Coalition government has yet to address the problem.
According to the Lancashire Evening Post however, there has been a drop on Preston for business rates tax as the city paid out around £2.73 million for the 2011-12 period compared to £3.5 million which was paid out three years prior to that period. However neighbouring areas such as South Ribble and Chorley have seen increases in £296, 228 and £342, 505 respectively from 2010-2011 to 2011-2012.
The managing director at Robert Pinkus and Co, Danny Pinkus, explained that the decrease in the amount collected in Preston was due to landlords finding ways around the tax. He goes on to explain that the tax is essentially a fine on a landlords inability to rent out a building.
The Chief Executive of the Taxpayers Alliance, Mr Sinclair, noted that the tax is unfair on those commercial or industrial property owners who are having to pay bills without a rental income. Many of these property owners are elderly retirees who have invested their wealth into units in order to supplement their retirement income. Our economy and society as a whole is affected by this wicked tax -“ as it prevents many from investing in new developments and projects -“ as there is the very real threat of having to pay rates on empty properties. This undermines and restricts economic growth directly.