Empty Property business rates relief reduction - April 2011.

The newspapers continue to be awash with stories of austerity Britain, budget cuts and belt tightening.

The barrage of information on the drastic action needed to cut budget deficits and government borrowing and the current politicking and positioning can make it difficult to work out what will or won’t actually happen.

One thing however that will definitely be happening - that will affect those businesses that hold empty properties - is the imminent reduction in the Empty Properties Business Rates relief. The Department for Communities and Local Government (the DCLG) has confirmed that, with effect from 1st April 2011, the exemption threshold for Business Rates Relief on empty non-domestic properties will be cut back to £2,600, as originally planned.

It will still remain the case that Business Rates are not payable on empty non-domestic properties with a rateable value below a certain threshold. However, the current level of £18,000 (which the Government temporarily increased for the year 1st April 2010 to 31st March 2011) will now return to the lower rate of £2,600.

The obvious result of this will be that fewer empty non-domestic properties will be exempt from Business Rates and businesses with empty properties, perhaps as a result of office closures or downturns in business, will face the unwelcome prospect of having to find extra money to pay Business Rates again from 1st April 2011.

In view of the current state of the economy and difficulties faced by businesses during the downturn, many industry insiders had hoped that the threshold would not be reduced just yet.

If you would like more information on the impact on this change, please contact a member of FDC Law’s Commercial Property Department.