12 Days of Christmas – Day 4

As the festive season is now upon us, our team of Real Estate Litigation elves have been searching through the archives for the most interesting and important legal developments this year. In our "12 Days of Christmas" feature, we take you on a whistlestop tour of the most interesting of developments that haven't made it into our new blog.

On day 4, we look at the Non-Domestic Rating (Unoccupied Property) (England) (Amendment) Regulations 2024 (SI 2024/323) which on implementation had the effect of more than doubling the “reset period” for empty property relief by extending from 6 weeks to 13 weeks.

Where business premises fall vacant, business rates liability passes to the person who is entitled to possession of the property, this is usually the freehold owner. Relief is available for an initial three-month vacancy period before the property becomes subject to full 100% rates liability (with a six-month relief period applying for industrial and storage premises). If premises fall vacant again, a further relief period will apply, but to qualify for a new period of relief, the property must have been occupied continuously for a period of 6 weeks prior to it falling vacant again.

The Government felt this system for relief was open to abuse. The Government published a summary of responses following the Business Rates Avoidance and Evasion Consultation which ended in September 2023. It had considered in particular how to address avoidance schemes involving repeated short periods of artificial or contrived occupation enabling repeated access to the relief. To deal with abuse of the relief, the 6-week occupancy period was increased a 13-week period.

2024 regulations did include some transitional provisions but any such transitional cases will have now expired. Currently, the position is that where a vacant property is reoccupied on or after 1 April 2024, a 13-week period will apply before the property can benefit from a further period of empty property relief.

In addition to the change in the reset period, the then Government also indicated their intention to undertake a further consultation looking at the introduction of a ‘general anti-avoidance rule’. This would seek to provide local and central government with greater agility to tackle avoidance and review new threats and avoidance schemes as they emerge. It remains to be seen whether this is something that will be actioned by the new Government.

If you have managed to read this far, here is your reward of a festive joke to get you in the Christmas spirit: Who tells the best Christmas jokes? Reindeer. They sleigh every time.