Rural businesses slam ‘hidden tax’

Thousands of firms across the region’s countryside, still struggling with the aftermath of the recession, could face bills of more than £20,000 from April when new tax regulations come into force.

Farmers and landowners who run commercial property on their land such as offices currently do not have to pay an empty rates levy, which taxes buildings empty for more than three months, if their rental income is less than £18,000 a year.

This practice was established following exemptions set up by the previous Labour government in 2008 and came after months of campaigning from rural business leaders, with some farmers threatening to take the roofs off of their buildings in order to avoid the hefty tax bill.

From April this year, however, people who own an empty commercial property valued at more than £2,600 will be liable.

Business leaders have condemned the move saying it will stifle the fragile economic growth there is in the countryside. Yorkshire director for the Country Land and Business Association, Dorothy Fairburn, said the move would affect more than a 1,000 firms across Yorkshire.

“Local government statistics show that there are hundreds of empty non-domestic properties across rural Yorkshire – in the Hambleton, Ryedale and Craven districts alone there are more than 1,000.

“In the current economic climate, many of our members have lost tenants from their office and workshop conversions and are now looking at empty property tax bills in excess of £20,000 a year, which is totally unacceptable.

“This is an outrageous hidden tax from the Government. Applying non-domestic rates to empty property is a disincentive to investment for providing and improving rural business premises to let. It is more likely to encourage demolition and other actions to make buildings unusable to avoid this unjustifiable tax.

“It will be damaging to the rural economy.”

The tax hike also drew criticism from the British Property Foundation who said the raise would come at the worst possible time for small businesses.

“We campaigned very strongly for this to get some form of relief for empty property rates in 2008 and there was limited relief, made to try and help the smallest businesses,” a spokesman said.

“The Government will remove this again in April and is doing this at the worst possible time.

“The number of empty properties is actually increasing according to the Government’s own figures.

“If the Government is serious about wanting to create a private sector led recovery than this kind of tax hike on small business is clearly the wrong way to go about it.”

Michael Parker, the head of taxation with the National Farmers’ Union, said: “We do have concern on this issue. Many farmers have diversified into commercial property out of economic necessity. Any change to the way this is handled could mean severe financial hardship for smaller rural businesses.

“It is not going to encourage further investment that bring money into rural areas.”

The NFU is currently surveying its members on the issue to produce evidence of the impact the move will have on rural businesses.

The Department for Communities and Local Government was unable to provide the Yorkshire Post with a comment on the matter.