Schemes to avoid payment of business rates

Due to the uncertainty surrounding Covid-19 panic many business are in a time of crisis, which in turn has left many landlord’s without tenants and empty properties. If a Landlord has a vacant property they will be responsible for business rates. A Landlord in general terms may receive a maximum of three months relief for business rates if a property is vacant.

What if the Landlord can’t find a new Tenant within those three months?

Unless the Landlord qualifies for a specific exemption, they will have to pay business rates at the full amount. This can be costly as there is no rental income to offset the payments. However, a recent case heard in the court of appeal Rossendale Borough Council v Hurstwood Properties (A) Ltd and others [2019] EWCA Civ 364 it was considered that schemes where short leases are granted to special purpose vehicles which were then allowed to be dissolved could succeed in avoiding payment of business rates.

If you are a landlord with empty properties paying business rates, contact our Commercial Property Department to speak to a specialist who will be able to help.

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