Empty units in West Norfolk costing taxpayers £1m per year
Empty businesses in West Norfolk are costing taxpayers an average of £1 million in lost rates each year as part of a national relief scheme.
The analysis, by the BBC’s Shared Data Unit, shows that over the past five years £5.2 million of potential rates income has been lost due to empty premises.
Experts say business rates are “critical to the stability of local authority finances”, whereas others say the tax “disproportionately harms retailers”.
Under law, empty business premises cannot be taxed under the business rates system for at least three months – in a scheme designed to allow for property investment and give landlords time to find a new occupant.
Not all of the potential income lost through the scheme would be retained by the borough council though – around half of business rates collected is retained by the authority, and the rest returned to the Government for redistribution.
Last year, the council collected £43m in rates for all businesses. The relief amounted to 1.94 per cent of the potential rates income in the area.
Dr Kevin Muldoon-Smith, of Northumbria University, who runs consulting agency R3intelligence, said: “Business rates, along with council tax, will be very critical to the stability of local authority finances going forward because of central government grants being reduced.”
Whereas Dominic Curran, property advisor at the British Retail Consortium, said business rates “disproportionately harms retailers, driving shop closures and job losses, leaving empty shopfronts and harming local communities”.
“It is essential that the Government makes good on its pledge to reform this broken tax system,” Mr Curran added.
The forecast for empty premises relief for the 2019-20 financial year shows that out of 5,970 business units in West Norfolk, the council told the Government that 312 need empty premises relief.
This would work out to a lost income of around £957,351 – amounting to 1.61 per cent of the potential rates income in the borough.
A HM Treasury spokesperson said the relief “strikes a balance” between incentivising property owners to rent out their units, while not penalising those who lose a tenant at short notice.
“We will announce further details of the business rates review in due course,” they added.
More by this authorRebekah Chilvers