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Following the High Court decision in the Makro cash and carry case reported last week, another court decision has piled further pressure on Billing Authorities and on Government bodies over empty rates avoidance schemes.

 

In the Makro case the High Court determined that empty rates avoidance by storing documents in a small proportion of a building to trigger a new rates-free period was a legal tactic. Now a Magistrates’ Court decision in Cheshire has approved another empty rates avoidance tactic. In the latest case, Cheshire and West Cheshire Council v Public Safety Charitable Trust , the court approved as legal a scheme whereby a vacant office building was let to a charity to house a Wi-Fi installation and the charity claimed 80% charitable rate relief.

 

The Magistrates’ Court found that the charity, Public Safety Charitable Trust (PSCT) was in occupation of the office building, despite an attempt by the Valuation Office Agency (VOA) to create a separate assessment for the Wi-Fi network. The decision means that PSCT is entitled to 80% rate relief on both the office building and on the Wi-Fi network.

 

The Court decision was critical of both the Billing Authority; describing its attitude to PSCT as “inconsistent“, and the VOA; viewing its attempt to create a separate assessment for the Wi-Fi network as “poorly worded, vague, and extremely hard to reconcile with the facts”.

 

On the decision, Blake Penfold, head of rating at GL Hearn, commented: “Billing Authorities and the VOA seem to be tying themselves in knots trying to argue against empty property rates avoidance schemes. Billing Authorities are now trying to argue that actions which a few years ago they would have said constituted occupation, now do not. The VOA is trying to manipulate the rating list so as to head off what it regards as “avoidance” actions. The Courts however are having none of it. I hope that Julian Sturdy MP and his group reviewing empty rates will look at these cases, and at the report issued by the Welsh Business Rates Review, and accept that Empty Property Rates are damaging the economy and the property market. We need to revert to a sensible level of EPR liability and to rates-free periods that reflect the reality of trying to let vacant property in the current market.”