RICS wrote to Bob Neill MP, Communities and Local Government Minister, in November 2010 to highlight the negative impact that proposals to cut Empty Property Rate Relief in April 2011 will have on future development.
Currently, businesses with empty property of a rateable value less than £18,000 do not have to pay empty property business rates, a measure bought in by the previous Government. However, the threshold will be cut to £2,600 in April.
The Government estimate that this will save the public purse £400million in 2011/12. However, RICS is concerned that the impact on local business and development will be far greater. RICS recognises the need to reduce public expenditure and asked the Minister to consider making Empty Property Rate Relief available for 12 or 18 months before full business rates become payable.
RICS suggested other measures the Government could introduce, including retaining the empty property exemption for listed buildings, exempting companies in administration from business rates and delaying the introduction of anti-avoidance regulations.
RICS was the first organisation to highlight potential problems with empty property rates to MPs in May 2007 and produced the first major piece of evidence on the impact of changes to Empty Property Rates with Lambert Smith Hampton. RICS has continued work closely with MPs and the national and trade press on this issue and made representations to the Treasury on EPR as part of our 2008 Pre-Budget Report submission.
In his response to RICS, the Minister highlighted the measures the Government has already taken including doubling small business rate relief for one year and the waiving of £175million of backdated business rates in the Localism Bill. Unfortunately, the Government believes that support for Empty Property Rate Relief for 2011/12 is unaffordable. The Minister will be keeping the matter under review and RICS will continue to monitor the issue.
The forthcoming Local Government Resource Review will take forward proposals to enable councils to retain locally-raised business rates. RICS look forward to working with members and Government on these proposals.