The Court of Appeal’s Decision
A recent Court of Appeal judgement has provided further guidance on temporary occupation arrangements known as “box-shifting” schemes, which have been used to mitigate empty property rates liabilities. This typically involved placing boxes containing redundant items in a vacant property for a specified period. Once the boxes were removed, the owner could claim a further period of empty property rates relief.
The Court found that this was not a genuine occupation of the property for business rates purposes as it served no real commercial purpose other than reducing the business rates liability. The decision overturns an earlier ruling and could affect landlords and property owners with vacant commercial premises across the UK who have relied on this arrangement to reduce empty property rates liabilities.
What This Means for Property Owners
Councils may now look more closely at similar schemes where there is no clear business reason for occupying a property. However, the Court made it clear that this decision relates specifically to “box shifting” arrangements. It does not mean that all options for reducing empty property rates are no longer available.
The latest judgement indicates that occupation must provide a genuine practical or commercial benefit beyond the reduction of business rates liability. Other forms of relief and rates-saving options may still be available, depending on the property and the owner’s circumstances. Property owners currently using, or considering, empty rates mitigation schemes should review their arrangements and seek professional advice where necessary.
How Vickery Holman Can Help
Vickery Holman’s Rating team can provide guidance on the potential impact of this ruling and discuss alternative options for managing empty property liabilities.
