A new campaign is urging ministers to close loopholes in England’s business rates system, claiming councils lose up to £300m annually through avoidance schemes.
End Rates Avoidance (ERA), is calling on the government to tackle practices that allow some property owners and occupiers to reduce or avoid paying business rates. Campaigners estimate local authorities could be losing between £250m and £300m each year.
The initiative is led by Shaylesh Patel, founder and chief executive of ethical rates mitigation consultancy ASTOP. He previously launched the Ban Box Shifting Campaign, which gained backing from around 100 councillors and MPs.
One common method, ‘box shifting’, sees landlords or occupiers place a few items in an empty commercial property briefly to make it look occupied. Once the property is empty again, it can claim empty rates relief. By repeating this, some reduce their bills while the building remains largely unused.
Other schemes include ‘snail farms’, where minimal equipment and a few snails are installed to claim agricultural exemptions, and the temporary designation of buildings as places of worship to obtain charitable or religious relief.
To tackle these practices, ERA has outlined a six-point plan:
- Extend the period of genuine, continuous occupation required to trigger rates exemption to six months
- Introduce a one-year upper limit on properties left in limbo due to insolvent tenants
- Promote ethical mitigation by supporting genuine charities to occupy vacant properties
- Close the ‘snail farm’ loophole
- Strengthen powers to ensure empty rates relief is granted only in legitimate cases
- Close the ‘fake place of worship’ loophole by ensuring only verified religious buildings qualify for exemption
A video of the campaign can be seen below or watched directly on ASTOP’s YouTube channel.
Speaking to Newstart, Shaylesh Patel, said: ‘Ending business rates avoidance is not only about fairness in the tax system, but also about protecting the services that communities rely on every day.’
‘Councils are losing hundreds of millions of pounds each year through loopholes that allow properties to sit unused while liabilities are reduced or avoided,’ Patel continued. ‘Recovering this funding would give local authorities greater capacity to invest in frontline priorities, including adult and children’s social care, early intervention programmes, and support for vulnerable residents.
‘There is also an ethical alternative for landlords and developers. They could choose to temporarily make any vacant retail, office, and storage space available to charities, food banks, and other organisations allowing those spaces to serve the community rather than stand empty.’
The campaign has also been backed by ethical landlords and Power to Change, an independent trust who previously launched its Take Back the High Street Programme.
Bassam Mahfouz, London Assembly Member, added: ‘Stamping down on unethical business rates avoidance is a necessary step for councils across the country that are under intense pressure to fund critical services.
‘Supporting this campaign means supporting practical reforms, from tighter rules on empty rates relief to closing loopholes that allow exemptions to be misused.’
Media: ERA/ASTOP
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