Retailers unite over bombsite Britain tax

The UK's major supermarkets have joined forces with other big brands to back a British Property Federation (BPF) call to scrap empty rates.

The UK's major supermarkets have joined forces to back a British Property Federation (BPF) call to scrap empty rates.

Tesco and Asda were among the businesses that backed the BPF in an open letter sent to the Prime Minister yesterday (28 October). The letter asked business rate relief on empty buildings to be reapplied immediately, to stop the chaos of demolitions and bankruptcy for small and large firms.

Rate relief was scrapped this April in a bid to raise £1.3bn. Now, some property experts believe the figure could rise to £2bn due to so many firms having vacant space.

BPF chief executive Liz Peace said: "It's like making the unemployed pay income tax. Taxing hardship and business failure is a ludicrous way to help people through the hard times. Brown must act now to undo this mess."

Asda, which has admitted flattening a call centre to avoid empty rates, said: "Just as things have become more difficult economically, the government has imposed an ill-timed tax on empty properties, which has had a number of unintended consequences."

The supermarket had planned a £100m redevelopment of a six-acre site in New Barnet, Hertfordshire, but decided instead to demolish the building.

The British Property Federation has led a year-long campaign, backed by dozens of MPs, against empty rates - dubbed the 'bombsite Britain' tax over the way it causes landlords to demolish buildings rather than go bust paying rates.

Support for a Commons motion against the tax, placed by Halifax MP Linda Riordan, has doubled in the last week to over 70 MPs.

Shadow business minister Alan Duncan called the tax 'immoral', saying: "Taxing something that generates no revenue does enormous damage.

"Removing the tax relief for empty property rates is bringing to a grinding halt any kind of activity for preparing business premises or developing wrecked premises for future use. It is taking money from people who have not got it to the point where they have to take the roof off or demolish what they have just built."

The letter sent to the Prime Minister is as follows:

Dear Prime Minister,

Scrapping relief on empty property is having a crippling effect on the UK economy, and particularly the property, retailing and manufacturing sectors.

In addition, it is also hampering regeneration by preventing development and will have a damaging effect on pension fund holdings in property which have already been hit hard by the current economic downturn.

We, the under-signed, therefore urge you to:

Restore the empty rate relief that existed before 1 April, 2008, so that all unoccupied properties receive full relief for the first three months; shops and offices pay 50% subsequently; and industrial premises receive full relief indefinitely.

We are united in calling for this, and support Property Week wholeheartedly in its 'Empty Threat' campaign to secure these aims.

Yours sincerely

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