Business rates relief on empty buildings is to be scrapped. Owners of shop or office premises have been able to claim discounts on business rate for the first six months that they are vacant.

There has been no time limit at all for the discounts on empty industrial buildings. Now the period will be reduced to three months for commercial buildings and six months for industrial premises.

The change, announced in the 2007 budget, could affect companies that close operations or move to new buildings. They may add to the supply of available space, however, easing pressure on accommodation costs.

The Federation of Smaller Businesses had lobbied the Treasury to end the generous business rate relief and welcomed the change. “This will ensure the better use of commercial premises,” said Carol Undy, the FSB’s national chairman.

The 2007 budget also included measures that will hit owners of commercial property by reducing capital allowances however. The 25 per cent allowance on fixtures and fittings inside buildings is to be cut to 10 per cent. The ability to write off industrial buildings at 4 per cent a year over 25 years is also being withdrawn.

For more information please visit www.hmrc.gov.uk  

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