A senior government adviser has lashed out at the abolition of tax breaks on empty commercial property, saying it has led to many buildings being demolished to save money.

The facts:

From April the government removed rates relief of up to 100 per cent on empty commercial buildings. The plan was to lower rents and increase the supply of property to businesses, but it will also add £1.3bn to HM Revenue and Customs’ coffers.

John Nicholls, chairman of the URC Chief Executives’ group, has launched a damning attack at the reversal. He says it has turned parts of UK cities into "bombsites "leaving them looking like “broken teeth”.

Business groups including the CBI, British Retail Consortium and British Chambers of Commerce as well as property groups like the British Property Federation, have also attacked the tax.

They claim that far from increasing available business space, the tax has restricted supply because business owners are demolishing offices and factories, and developers have seen demand for new buildings plummet.

They said:

Nicholls said: "There is a lot of pre-emptive demolition going on. This is already having a visual impact - cities are beginning to look like broken teeth."

Reacting to the criticism an HMRC spokesman said: "We have no plans to reverse the changes to empty the property rate relief introduced on April 1, but as with all taxes we will keep the position under review."

We say:

The government is in no position to repeal a tax that earns it £1.3bn a year, and the fact that small businesses are baring the brunt doesn’t seem to faze HMRC chiefs or Alistair Darling.

It looks like the tax is hear to stay, potentially ruining the looks of Britain's biggest cities, and lumping cash-flow pressures on businesses at the same time.

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By News Desk  on   Aug 26,2008

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Keywords

tax    HMRC    CBI    BCC    property    buildings    Darling   

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