How can you mitigate business rates on an empty property? Well, one company devised a plan to place boxes with redundant contents in otherwise unoccupied premises on a recurrent basis to reduce liability for non-domestic rates by two-thirds! The firm claimed it had saved clients over £500m by using its box scheme.
The City of London Corporation worked out the scheme was costing it £35m per annum in lost revenue, and took the box-shifting company to the High Court.
A judge ruled the scheme lawful, but now a Court of Appeal has sided with the Corporation.
A spokesperson for the City of London Corporation said: “This landmark ruling closes one of the most widely used tax avoidance schemes in the country and helps safeguard revenues that support essential public services.
“We are proud that the City of London Corporation has led the way nationally in pursuing this case. For more than a decade, councils across the country have seen hundreds of millions of pounds of public revenue lost through artificial business rates avoidance schemes and we believe the decision restores fairness, protects money that funds vital local services, and provides greater certainty for councils, ratepayers and property owners alike.”
