Insider Media Limited

The Nottingham office of property agent DTZ is warning companies about the implications of the changes to empty business rate tax, which comes into play on 1 April.

Next month, the threshold for which properties become eligible for empty business rates will drop drastically from a rateable value of £18,000 to £2,600.

Phil Glenn, head of DTZ’s Nottingham office, said: “The current exemption threshold (until 31 March 2011) encompasses the majority of all business premises, typically smaller shops, industrial units, offices, stores, and vehicle repair garages which have rateable values below £18,000. Landlords who particularly benefit from this relief include those with business centres offering start-up units for small businesses, where void costs could otherwise be a problem.”

Glenn said that lowering the threshold will be an ‘easy win’ for the government, as it is estimated by the department for communities and local government that the change in legislation will bring in an extra £630m in revenue.

He added: “The effects will be devastating for property owners who are already struggling to find occupiers for their properties in extremely difficult market conditions and, in extreme cases, may even result in the demolition of perfectly sound buildings. Speculative development of small business units will now be completely stifled by the looming cost of business rates, which is yet another set-back for economic recovery.”