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'Bombsite Britain' tax fight backed
MULTINATIONAL companies have backed a Yorkshire MP's campaign to scrap a "bombsite Britain" tax which has prompted property developers to demolish buildings on prime sites.
Halifax MP Linda Riordan is leading calls for the Government to drop controversial empty property rates, which require businesses to pay tax on vacant buildings.
Support for her Commons petition doubled to more than 70 MPs last week, and now major companies including British Airways, Tesco, McDonalds and Nokia have boosted the campaign.
The large firms have joined developers and small property companies in sending an open letter to Gordon Brown, published today in Property Week magazine, demanding the immediate return of business rate relief on empty buildings.
"Scrapping relief on empty property is having a crippling effect on the UK economy, and particularly the property, retailing and manufacturing sectors," the letter states.
"In addition, it is also hampering regeneration by preventing development and will have a damaging effect on pension fund holdings in property which have already been hit hard by the current economic downturn."
Mrs Riordan said: "Far from being an issue that will just affect jobs and regeneration in Halifax, empty rates will hurt all areas of the country, irrespective of what industry or political alignment they have."
Campaigners warn that firms forced to make redundancies during the economic downturn will find themselves facing large tax bills on the properties they vacate.
Landlords in Yorkshire have been forced to knock buildings down in some cases, prompting critics to dub the rates a "bombsite Britain" tax.
John Haymes, director of property development for Hull Forward, said: "We have demolished some buildings in order to avoid paying rates but we have had to pay for other buildings that we are keeping for conservation reasons.
"It is money that could be used for other things."
Buildings on Hull's Fruit Market and Quay West sites have been demolished, while the Humber Quays development is paying empty space tax because it is only half-full.
"The two office blocks at Humber Quays were built in advance of demand to ensure that the city had offices to offer businesses as and when they are needed," Mr Haymes said.
"It's an example of where empty business rates don't quite work."
The publicly-funded company charged with regenerating Bradford has warned that developers may look elsewhere if empty property rates remain.
In a statement, Bradford Centre Regeneration said: "Private sector developers and investors face many variables in assessing whether a scheme is financially viable or not, including early land assembly, and this extra hurdle could swing the balance between deciding to develop or not in priority regeneration areas such as Bradford."
Shadow Business Minister Alan Duncan labelled the tax "immoral", adding: "Taxing something that generates no revenue does enormous damage.
"Removing the tax relief for empty property rates is bringing to a grinding halt any kind of activity for preparing business premises or developing wrecked premises for future use."
Liz Peace, chief executive of the British Property Federation, said: "It's like making the unemployed pay income tax.
"Taxing hardship and business failure is a ludicrous way to help people through the hard times. Brown must act now to undo this mess."
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Thursday 09 February 2012
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