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News - 12/06/2013

Manchester ruling challenges empty rates

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Following a landmark decision by the High Court, many businesses could now seek to avoid extensive business rates on empty commercial premises through the use of Bluetooth messaging devices.

A District Judge ruled earlier this year that the presence of a Bluetooth messaging device in a warehouse operated by Complete Mobile Marketing constituted occupation, and could be used legitimately as a means of securing a rate free period of six months. In response to an appeal by Sunderland City Council against the decision, the High Court has also backed up the ruling.  
 
Paul Nash, Director of Rating, said: “This judgment is welcome news for investors and landlords struggling to secure tenants while dealing with extensive empty rates charges.”
 
Following a change in the law in 2008, local authorities have been forced to charge empty rates on any business premises with property owners subsequently seeking legal strategies to avoid the hefty outgoings. 

High Court decision 'a victory for common sense'

A representative of Complete Mobile Marketing commented: “The advice we had received throughout this challenge - from both lawyers and expert rating surveyors - was that our methods were above board and legal. The High Court decision is a victory for common sense.”

Nash continued: “The Bluetooth model, which is regarded as a legitimate and beneficial occupation under rating law, does not require complete occupation of the premises, unlike other recommended schemes. Landlords with empty business space should seriously consider using the same method – it has the potential to save up to 80 per cent of the annual cost of empty rates, while only using a small part of a property.”
 
The government has not indicated to date any intention to change the law relating to empty property rates, which are expected to recover between £500m and £1bn for the Treasury annually.

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