A recent High Court judgement has provided commercial property landlords with reassurance about the use of ‘cyclical occupation’ schemes as a way to mitigate their liability for business rates on empty properties.
Lawyers say this is a useful step towards ending protracted arguments between commercial landlords and ratings authorities over what constitutes a rateable occupation and is a clear statement that these mitigation schemes are lawful and effective.
In the case of R (on the application of the Secretary of State for Health and Social Care on behalf of Public Health England) -v- Harlow District Council Mr Justice Kerr proposed a protocol to be followed by both parties and gave a means for a Magistrates Court to impose costs sanctions where the protocol is not followed.
Simon Freeman, a partner and property litigation specialist at national law firm Clarke Willmott LLP, said: “Business rates and council tax together make up local authorities’ largest source of income. Changes to impose liability for business rates on owners of empty commercial property have significantly increased the tax burden on commercial landlords. Over recent years, the Court has been asked to rule on the validity of various types of business rate mitigation schemes deployed by commercial landlords. However, Mr Justice Kerr sitting in the High Court, has now given a very clear and helpful judgement that should go a long way to limiting claims and the legal and other professional costs associated with them.”