The Government’s policy of removing empty rates relief on industrial buildings is preventing small and medium-sized companies from contributing to the region’s economic recovery, warns industrial property expert Russell Crofts.
Vacant industrial properties with a rateable value of less than £18,000 a year had previously been exempt from business rates. But in April the Government cut the threshold to just £2,600 a year – saving £400m annually in tax relief.
Mr Crofts, industrial partner at the Bristol office of property agents Knight Frank’s Bristol office, said: “The economic recovery of the West Country is particularly dependent on the growth of small and medium-sized companies. But this move is a retrograde step that is damaging their ability to trade.
“Developers will not speculatively develop industrial units and warehouses with the potential burden of empty rates payments hanging over them. New stock will therefore only come from pre-lets, and no-one pre-lets units below 10,000 sq ft. So the region’s smaller businesses will have no new buildings to occupy as they expand.”
Mr Crofts wants the Government to think again. “It’s a barrier to growth,” he said. Referring to the recent announcement of the region's first Enterprise Zone in Bristol, he added: “Those inside the zone get a host of benefits while those outside are hit harder than they need to be. That can’t be the intention, surely?”
