Confusion over occupation for business rate relief
A number of decisions by the High Court regarding when business rates relief applies are set to cause confusion.
Full business rates are due on empty commercial properties that remain unoccupied after three months, with an extension of a further three months for industrial premises, such as warehouses. However, charities occupying commercial property qualify for a mandatory 80 percent discount on business rates, provided the property is used wholly or mainly for charitable purposes.
In a recent ruling, the High Court decided the landlord of an industrial warehouse could claim the relief, despite the only sign of rateable occupation beforehand being the installation of a small Bluetooth transmitter.
This was in line with a previous judgement, which stated that the use of 0.2 percent of a warehouse by Makro to store 16 pallets also counted as rateable occupation.
However, these two decisions are in stark contrast to the ruling in the Public Safety Charitable Trust Limited case this May, where the judge ruled that the installation of similar transmitters did not quality as rateable occupation in order for charitable rate relief to apply.
This discrepancy was noted in the latest ruling, with the judge stating that Parliament intended the mandatory exemption from rates should depend on the charity making extensive use of the premises for charitable purposes rather than leaving them mainly unused.