TaxPayers' Alliance exposes £1.1 billion tax bombshell of Empty Property Rates

The TaxPayers' Alliance reveals today that a massive £1.1 billion was paid last year in Business Rates on empty properties, a rise of 19 per cent between 2009-10 and 2011-12.

This is the first time that a figure has been calculated for the amount collected in empty property rates since exemptions for empty commercial and industrial properties were abolished at the 2007 Budget. Prior to 2007, empty industrial properties were exempt from Business Rates and empty commercial properties were subject to extensive reliefs and reductions.

Now, apart from a short exemption period and extremely limited reliefs, full Business Rates are payable on all empty commercial and industrial properties. With the economic downturn making it increasingly difficult for landlords to find new tenants, this tax has had some devastating effects:
  • Some landlords have had to resort to demolishing properties rather than paying the full rates while unable to find new tenants
  • Some pensioners who have bought commercial units as a means of supplementing their retirement income are facing economic ruin after being hit by crippling bills for the rates
A number of senior members of the Coalition Government were vocal in their criticism of this tax on empty property while in opposition.
  • Business Secretary Vince Cable described taxing an empty property in a recession as "a ludicrous situation, completely counterproductive and economically very damaging"
  • Education Secretary Michael Gove said that removing empty property rate relief was "universally recognised as a wicked and ungodly act"
  • DfID minister Alan Duncan warned that removing the tax relief for empty property rates was "bringing to a grinding halt any kind of activity for preparing business premises or developing wrecked premises for future use", noting that "taxing something that generates no revenue does enormous damage"
In government, however, both Coalition parties have failed to address the issue.

The report includes a figure for the amount collected in empty property rates by every council in England, Scotland and Wales over the last three years, with the totals region-by-region as follows:

Matthew Sinclair, Chief Executive of the TaxPayers' Alliance, said:

"It is extremely unfair that property owners are being hit with enormous Business Rates on properties which are empty, with no rent coming in that they can use to pay the bill.

"There are elderly people who invested in a small commercial or industrial unit in the reasonable expectation that the rent would top up their pension. This new tax is ruining them. The rest of us lose out as
the mere threat of having to pay rates on empty properties is discouraging people from putting money into new developments or refurbishing existing properties, which is undermining the prospects for economic growth.

"As the true scale of this ugly tax becomes apparent, Ministers cannot keep ignoring their own rhetoric in opposition and leave it in place."

TaxPayers' Alliance spokesmen are available for broadcast interviews and further comment

Media contacts

For interview bids:
Robert Oxley
Campaign Manager, The TaxPayers' Alliance
07795 084 113

To discuss the research:

Alex Wild
Policy Analyst, The TaxPayers' Alliance
07795 084 113

24-hour media hotline: 07795 084 113

Notes to editors

1. Founded in 2004 by Matthew Elliott and now with 75,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, cut spending and protect taxpayers. Find out more about the TaxPayers' Alliance at

2. The full report, including figures for every council in Great Britain, can be seen here:

3. The attacks on the abolition of Empty Property Rates relief by Vince Cable, Michael Gove and Alan Duncan are cited here:
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