Property tax move is a "low blow"
The government’s decision to axe empty rates relief for small businesses will “hit the most vulnerable businesses the hardest”. That’s according to Ian Pitt, from the Royal Institution of Chartered Surveyors (RICS) West Midlands, who spoke to Insider. Through the new legislation, vacant properties with a rateable value of less than £18,000 a year will no longer be exempt from paying business rates.
The new legislation will come into force in spring 2012. It has been estimated that the move could cost Britain’s businesses £400m a year.
Ian Pitt, RICS West Midlands spokesperson and head of the Birmingham office at Bruton Knowles, said the announcement was “another blow” from the government.
He said: “The recently announced changes to the empty rates levy exemption threshold will hit the most vulnerable businesses the hardest. At a time when economic conditions are already adding to businesses worries, this government decision delivers another blow as additional cost is added to their vacant property overheads.
“Small businesses in particular will be greatly affected, as essentially all non domestic properties are now liable. Taxing those who need our help the greatest, is not the most effective way of ensuring owners and occupiers will let void space more quickly.”
In a letter to councils, the Communities and Local Government Department wrote: “We would like to remind authorities that, from April 1, 2011, the rateable value threshold below which empty properties are exempt from rates will revert to £2,600.
“The threshold was £2,200, before it was temporarily increased in 2009-10 and 2010-11. However, it has now been uprated to £2,600 in line with the general movement of property values at revaluation.”
Redditch-based property consultant John Truslove said that introducing the new rates was akin to “hitting a man when he was down”.
“It is a tax on hardship when an area is often at its lowest ebb,” he said. “This will knock confidence at a point when the sector needs all the confidence it can get. While the economy remains fragile we could do without these knocks.”
The announcement came despite heavy criticism of the tax from communities secretary Eric Pickles and business secretary Vince Cable while in opposition.
