The Business Centre Association has today revealed that taxpayers are footing a staggering £690million bill on rates bills for empty property owned by UK Local Authorities.

The sum, revealed using the Freedom of Information Act, shows that more than 320 Local Authorities and Regional Development Agencies (RDAs) are nationally paying this additional tax to the Government.

These funds were levied under the empty property rates legislation launched in April 2008, which saw empty warehouses rateable for the first time after standing empty for six months and shops and offices rateable after only three months unoccupied.

Jennifer Brooke, executive director of the Business Centres Association (bca) - the UK’s sole trade association for the business centre and managed workspace industry – said: “Cash strapped councils are being pushed to the limit by national Government by this ridiculous stealth tax.

“Councils across the country may have no alternative but to increase business and council tax premiums in a bid to find funds owed on their empty properties as we move into recession.

“Revisions to the legislation announced by Alistair Darling in his pre-budget report in November will do little to help, as they only exempt property with a rateable value less that £15,000 and will only apply for the 09/10 financial year.

“We have been lobbying the government on this issue on behalf of our business space members from the day the White Paper was released, and we now call upon the Chancellor to make a comprehensive review of the shambolic rating system. The knock-on effect of these rates has been to drain money away from regeneration and economic growth across the country, at a time when this is a priority.”

Birmingham City Council has faced an additional £800,000 tax bill for its empty properties. Council leader, Cllr Mike Whitby adds: “ Birmingham’s large scale regeneration has propelled it onto the global stage but the government’s current 'tax now, ask questions later' policy is threatening this growth and suffocating vital new developments.”

In a bid to avoid an annual £110,000 rates liability, Swindon council budgeted £430,000 of public money to demolish a 14 acre industrial site. This has further fuelled the row over ‘bombsite Britain’ as a spate of demolitions took place to avoid payment.

Jennifer added: “Hazel Blears earlier this week suggested that the extra relief introduced in the pre-budget report represents a £205million saving for businesses. However, the average rateable value for commercial property actually exceeds £15,000 across all business sectors and is therefore exempt from any relief.”

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