A compelling case has emerged for clamping down on ‘empty rates’ avoidance and for enabling a pioneering ‘win-win’ solution to flourish, says Shaylesh Patel, Founder and CEO at ASTOP Limited.
The post Have you weighed up your ’empty rates’ options? appeared first on Open Access Government.
As you read this, the very mention of ‘empty commercial spaces’ is likely to kick up any one of a number of concerns for you.
Perhaps it’s the way empty rates avoidance is costing councils in England an estimated £300 million a year because of legal loopholes being exploited. Perhaps it’s that having commercial properties sit empty for months is so damaging – for landlords, the local council and also the wider community. Or perhaps, as a council Estates department, you’re wrestling with how to achieve a balance of positive financial and social outcomes.
Thankfully, there is a win-win solution available for both private and council- owned voids. More needs to be done to raise awareness of this charity-led option and to close the legal loopholes that restrict its adoption and heavily drain cash from councils’ vital services.
“THE BAD”: the ‘avoidance schemes’ depleting council coffersGenerous rates concessions for agriculture, mankind’s relation with god and a temporary break for landlords are amongst those being ‘legally’ exploited in plain sight – leading to the disingenuous rise in snail farms, fake places of worship and box shifting. (To learn more, see the links below.)
“One exploiter has 6,000 snails in suspended animation in a giant freezer…” The Guardian
“The boarded-up dental surgery did not appear to be usable for prayer sessions…” THE OBSERVER
The loopholes, already closed in Scotland and Wales, come at a significant cost to England’s councils and communities. Latest estimates put the figure at around £300m a year – enough to fund 2,000 council homes, 150,000 hospital beds or 12 brand new secondary schools every year. Apart from denying vital funds to councils, these schemes also deny vital space to deserving tenants, create ‘dead spaces’ and do nothing for our communities.
How can an empty space go from a burden to a blessing?When you have a commercial property sitting empty, the empty rates bill is not the only disadvantage. You also face: higher insurance, security and maintenance costs; an increased risk of vandalism and squatters; and reduced prospects of attracting commercial tenants.
“The charity letting gives us the flexibility we need… and the council is now making a net saving.” Estates Department, Dorset County Council
By contrast, when you put a vetted charity in place, you enjoy immediate savings, whilst providing precious rent-free space to local good causes. As well as saving at least 50% (typically 60%) on empty rates from day one, you have an option that can be easily terminated with one month’s notice. Highly flexible, this ethical solution works for spaces awaiting redevelopment, as well as those available to rent.
“THE GOOD”: the win-win solution embraced by several councilsASTOP are the pioneers of the ethical charity-led rates mitigation solution. We champion this as the only option that has not been squeezed in recent years, and has been strongly endorsed across the political spectrum (Red, Blue and Green!) An increasing number of councils are choosing to stop haemorrhaging money on their own empty properties… and to do something positive with them instead.
To date, those councils include: Dorset County Council, Southend-on-Sea City Council, Watford Borough Council and Woking Borough Council. Find out more
“For us it was a very straightforward decision. We couldn’t see there being any downside.” Chris Hodgkinson, Croxley Park Asset Manager (owned by Watford Borough Council)
See the short related video
For over a decade ASTOP has ‘matched’ empty spaces with suitable vetted charities that make a palpable difference to the local populace – from FREE book shops to soup kitchens. In some instances, there has been a powerful educational slant, most notably our ‘House Of Fakes’ installation at the prestigious site on 50 New Bond Street.
The legal loophole that now needs to be closedLaunched in 2023, ASTOP’s ‘Ban Box Shifting’ campaign garnered the support of over 100 MPs & councillors and prompted a change in the law, making this option far less viable. However, the subsequent emergence of other schemes has prompted us to retitle the campaign ‘End Rates Avoidance’, and calls for these wider legal loopholes to be closed.
“When a respected High Court judge concludes box-shifting is immoral but lawful, you know something needs to change.” Tom Perry, Holloway Bond, Rating Expert
By following Wales, we can extend the period that triggers the exemption. By following Scotland, we can empower councils to grant relief only to deserving cases, and adopt the alternative of charity-led rates mitigation.
Together, we can create a fair system that serves and strengthens our communities, redirect funds from exploitative practices to more deserving causes, and restore the tarnished reputation of the property industry.
We can also provide landlords with a clear incentive to ‘do the right thing’. Learn more and join our campaign.
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