Question 1: Would increasing the required duration of occupation during the ‘reset period’ from six weeks to three or six months be effective in reducing avoidance through empty property rates?
The LGA would support an extension to six months; this has been done in Wales and it could be done without primary legislation. In the LGA survey quoted above this was the most frequent cause of business rates avoidance through contrived occupation.
Question 2: What, if any, potential issues could arise from requiring occupation for three or six months during the ‘reset period’?
Billing authorities will still have to check for compliance and a longer period is no guarantee against contrived occupation.
Question 3: Would introducing a limit on the number of times EPR could be claimed in a given time period be effective in reducing avoidance?
Yes, we would support this at it would aim to deter businesses claiming sequential relief through minimal occupation such as storing boxes and it would aim to make such activity less financially rewarding.
Question 4: What, if any, potential issues could arise from limiting the number of times properties can benefit from EPR within a given period?
As the limit would relate to the property and not the occupier, a limit could mean that the new occupier could be prevented from claiming EPR for a legitimate reason such as refurbishment; the billing authority could be given discretion over such cases.
Question 5: What are your views on adding additional conditions to the meaning of occupation for the purposes of determining whether a property should benefit from a further rate free period?
We would support this, for example a condition on whether it appears to the authority that the property is ‘wholly or mainly’ occupied would be a statutory way of preventing minimal occupation for the purpose of qualifying for a period of empty rates relief. Another would be that the occupier should be able to demonstrate a genuine business need/benefit.
Question 6: How could the additional occupation conditions be effectively defined to reduce avoidance?
One idea would be to allow the billing authority discretion if they have reasonable grounds to suspect that the ratepayer is using contrived, artificial arrangements that serve little or no purpose other than to reduce business rates liability.
Question 7: What are your views on reforming the current arrangements for empty property rates relief and replacing them with a local, discretionary scheme?
In principle we would support this, but we are conscious that the government partially supports mandatory reliefs and would not want to see billing authorities lose resources due to reliefs being made discretionary rather than mandatory. As the question says, there are many examples of local authorities using their s.47 discretionary relief powers which are funded by the Government, and these could be used as a model.
Question 8: Are there any other additional criteria which, in your view, should be met for a property to qualify for EPR?
We have no further suggestions and would refer the Government to replies from billing authorities.
Question 9: Would removing the ‘next in use’ exemption, in your view, be effective in tackling avoidance of EPR?
Yes, the ‘next in use’ exemption also figured in the LGA survey. We are concerned about charities being drawn into rates avoidance arrangements.
Question 10: What issues may be caused by the removing the ‘next in use’ exemption?
Genuine charities could be adversely affected by this; this could be tackled by making the relief discretionary as suggested in question 11.
Question 11: What are your views on how the ‘next in use’ exemption may be improved to minimize the opportunities for rates avoidance, including (but not limited to) introducing additional criteria or devolving the award of the exemption to local authorities?
We would support devolving the award of exemption to billing authorities on the same conditions as in the answer to question 7 above, that authorities do not lose resources through reliefs being made discretionary rather than mandatory.