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Today's announcement that confidence in the UK manufacturing industry is at a 30 year low is yet another knock for an industry which has been under pressure for over a decade. As the UK economy...
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Tuesday 26th August 2008
While it did not receive an awful lot of coverage in the financial press it seems as though a move by the government back in April which took away rate relief on empty buildings is leading to a massive increase in demolitions. As businesses seek to cut back their tax bills as much as possible many are now looking to flatten empty buildings and offices in order to avoid what can be a substantial tax charge.
One business saw their tax charge increase by £120,000 overnight after the new rules came in which led to the demolition of the property in question. The problem in the medium to longer term, when the economy improves, is the fact that much warehouse and office space will be taken out of the system.
This will lead to increased competition for commercial properties in some areas and possibly push prices up to artificial levels. While some landlords may see this as a plus point it will increase the base cost of many businesses, a cost which will probably be pushed on to the consumer. The rules seem to have been changed because some landlords were suspected of hanging onto empty property, and claiming the tax relief, in the hope of higher rental incomes tomorrow. |
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