Some landlords take advantage of a loophole in the law to obtain rate relief. They put boxes in an empty commercial space – then say the space is occupied for six weeks. The boxes are then removed, and the landlord gets three months’ empty rates relief.

Occupation of commercial property that ends after 6 weeks will trigger eligibility for a 3 (or 6) month rates free period. Unscrupulous landlords and multi chain operators responsible for their closed branches take advantage of this loophole by placing boxes inside an otherwise empty premises, claiming it is occupied for 6 weeks, to benefit from the rates free period thereafter. When the rates free period is over, again placing boxes in the space for a further 6 weeks and repeating the cycle. Hence box shifting. Councils lose over two thirds of their rates income every time this cycle is repeated.

To stop this, we want the Government to replicate what has happened in Wales, and increase the required period of occupation, that activates rates exemption, from 6 weeks to 6 months.

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Further information

The English Government is currently carrying out an  open consultation on business rates avoidance, exploring the causes of rates avoidance and potential measures to combat this, in order to protect essential funding for local services.

The Welsh Government effectively stopped box shifting in Apr 2022. More information about this in the links below:

Dear Government,

We, the undersigned, are writing to express our support for the new charity initiative, Ban Box Shifting, which aims to tackle the issue of business rates avoidance in England and save our councils an estimated £250 million annually. This is an important matter that affects our communities and public services, and we believe it is time to take action.

The practice of box shifting, whereby landlords and multi-chain operators exploit legal loopholes to trigger a three- or six-month rates-free period, is draining vital funds from our local authorities. It is estimated that this tactic costs councils £250 million per year, a sum that could be used to build 2,000 council homes, fund 150,000 hospital beds, or establish 12 new secondary schools.

It is time for England to follow in the footsteps of Scotland and Wales, both of which have already passed legislation to address this issue. We are urging the Government to consider the Ban Box Shifting five-point manifesto:

1. Ban Box Shifting by extending the period of occupation which activates rates exemption from six weeks to six months
2. Give councils more powers in deciding when empty rates relief can legitimately be granted
3. Put a one-year time limit on avoidance and properties left in limbo because of insolvent tenants
4. Remove the snail sham option in non-agricultural space (occupiers sometimes put snail farms or other similar species to claim a space is agricultural land)
5. Promote ethical rates mitigation.

By extending the occupation period required for rates exemption and granting councils more authority to decide when relief can be provided, we can prevent businesses from exploiting loopholes for financial gain. Furthermore, implementing a one-year time limit on avoidance and removing sham options will provide additional safeguards against fraudulent practices.

We also advocate for the promotion of ethical rates mitigation, which involves offering rent-free spaces to charities. This sustainable solution benefits local communities, landlords, and charities, and is already recognised by some councils’ estates teams as a means to save money and support communities.

We firmly stand behind the Ban Box Shifting initiative and urge the Government to take action in addressing the issue of business rates avoidance. By doing so, we can save our councils millions of pounds, which can then be reinvested in vital public services for the betterment of our communities.

Sincerely,