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Government acts on empty property tax

Over the last few months there has been a rather strange phenomenon in the UK property market whereby those with empty properties have still been forced to pay business tax at the full rate. In many circumstances businesses have been forced to demolish buildings to avoid the tax which was crippling many and causing serious cash flow problems. However, the government has today announced a one-year embargo on properties with a rental value under £15,000 which it predicts will hit 70% of the empty property market.

Business tax on empty property is seen by many as yet another indirect tax which has increased costs for both consumers and businesses throughout the UK. Even when some businesses have decided to demolish empty buildings to save on business tax the Inland Revenue has queried whether this is actually tax avoidance and threatened to take legal action. We now have the potentially bizarre situation whereby companies may be forced to retain empty properties and pay the full business rate tax in the future.

For a government which prides itself on helping small businesses this empty property tax has done nothing for the industry. Even the announcement today will only last for one year and not even cover the whole market.

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