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Maximising empty rates relief

20 November 2012

The recent case of Makro Properties Limited and another v Nuneaton and Bedworth Borough Council provides businesses with an opportunity to save business rates by extending empty rates relief.

Commercial property qualifies for 100 per cent relief for the first three months, after falling empty (six months for industrial property) after which full business rates apply.  But if the property is re-occupied for six weeks or more before again falling empty, then another six-month exemption applies. There appears to be no limit as to how many times this can be done.

In the case, following the surrender of their lease, Makro stored a few pallets of archived documents for six months at the premises by arrangement with their landlord. When that licence expired, they applied for a further six month rate-free period. The council refused but Makro challenged and won on appeal.

Even though the stored documents occupied only 0.2 per cent of the warehouse’s floor space, the court ruled that this amounted to ‘actual occupation’ for the purposes of business rates. Therefore a new period of empty rates relief applied when that occupation ended.

The decision means that a landlord seeking to minimise the burden of rates on empty premises can let the property on a short-term basis of six weeks or more, then successfully trigger a fresh period of empty rates relief. Even if the main aim of the letting is to gain empty rates relief, it will be successful. Providing certain conditions can be met, the landlord will successfully be able to claim for empty rates relief when the occupation comes to an end. We are happy to advise further.

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

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Alasdair Garbutt LLB (Hons)
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Alasdair Garbutt
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