Legislation introduced by the government to curb the number of empty commercial premises is having a ‘stifling’ effect on small businesses and the economy as a whole, experts have warned.
The British Property Federation (BPF) said businesses forced to pay up after the government cut the rate relief on empty commercial property are being ‘hit hard’.
The tax, introduced in April as part of a raft of legislations designed to reduce rents and increase the supply of business premises, is expected to raise £1.3bn for the Exchequer.
But the BPF argued that it is facing many small business owners with a choice between demolishing buildings or bankruptcy. “It is simply a tax on business failure and makes no sense,” commented BPF president Francis Salway.
The group’s finance director, Peter Cosmetatos, added that the tax ‘makes a mockery’ of the government’s commitment to delivering sustainable communities.
“In trying to fill holes in his budget, Alistair Darling is causing more chaos to the economy with an ill-conceived move that is hurting regeneration and reducing the supply of affordable property that is essential for business,” he said.
“The tax is causing older buildings to be demolished early and new projects to be shelved. The result will be less available property and higher rents when demand begins to recover.
“It is virtually impossible to quantify the cost of the direct and indirect consequences of imposing rates on empty property. What is clear is that they are wide ranging and far reaching and will store up problems for the economy for years to come.”
© Crimson Business Ltd. 2008
