Business Rates Relief and Wi-Fi Boxes

Empty Rates Relief

Under current rules, most empty properties are eligible for 100% relief for a maximum period of six months in the case of industrial and warehouse premises, and three months for other premises.

Short-term occupation by a tenant for six weeks or less will be ignored, and the six and three months’ period will continue to run.

Where the property is let or occupied for a period of more than six weeks, the period of relief will stop (on the basis that the tenant or occupant becomes liable for the rates), and when the property becomes vacant again a new period of relief can be claimed, and so on.

Wi-fi lettings

Various schemes have been set up over the years to reduce rates liability and some are specifically geared towards the short-term occupation arrangement. One such scheme involves granting a lease to a company that installs equipment to provide wi-fi and broadcast advertisements to passers by. The equipment takes up a very small amount of space and no staff actually occupy the property.

Sunderland City Council tried to challenge one such letting through the courts in 2013 but lost, and since then this type of arrangement has become increasingly common.

A word of caution: the Sunderland case was decided on its own facts. Councils no doubt keep a close eye on rates saving schemes, and may decide to challenge schemes that differ from this one. Owners should take advice to make sure that the arrangements they intend to enter into are likely to succeed.

Three points to bear in mind if you are considering this type of arrangement:-

1. Although the arrangement will usually only last for just over six weeks, technically you will be letting out the premises. You should therefore make sure that the agreement contains some basic terms that will protect you as the landlord.

2. If you rent rather than own the premises, your lease will most probably contain restrictions against subletting and it is likely that you would need permission from your landlord.

3. If you have mortgaged the premises, you will probably need the lender’s consent.

For more information on this topic please contact Jon Mowbray, partner in IBB’s Real Estate Dispute Resolution team on 01895 207988 or jon.mowbray@ibblaw.co.uk.