Thinking outside the box: Progressive Group call for end to shady 'box shifting' practice
A Green Partt councillor will put forward a motion next week calling on Exeter City Council to back moves to end ‘box shifting’ - a loophole used by businesses to avoid paying business rates [1]. The practice involves landlords exploiting business rate relief they receive from having an empty commercial space. Instead of finding new tenants, landlords put boxes in the space so it appears occupied for six weeks. After this time, the boxes are removed, and the landlord can claim three months of additional business rates relief. This process can then be repeated indefinitely so landlords can continually collect rate relief.
In practice, businesses employ other companies to do the ‘box shifting’ for them. There are several businesses of this type operating in Exeter.
Green Party Councillor, Tess Read said:
“Box Shifting is a well established business rates avoidance scam which enables landlords and multi chain operators to exploit legal loopholes. It triggers 3-6 months rate relief, which deprives Councils of much needed funds for important local services.
“In Exeter, the practice deprives Exeter City Council of around £150,000 in business rates each year. It also leaves premises standing empty, disfiguring our city centre and depriving charities, community art projects and others of what could be useful community-centred space.”
Cllr Michael Mitchell, Liberal Democrat, who will be seconding the motion, says
“We need to think outside the box. This loophole could be closed by extending the period in which businesses need to occupy a property before empty business rate relief kicks, from six weeks to six months. Councils also need to be given more powers to decide when empty rates relief can legitimately be granted [2].
“We urge councillors to back this motion which calls on the Chief Executive to write to the Secretary of State for Levelling Up, Housing and Communities demanding he prevent box shifting.”
Notes
- Motion in full: http://committees.exeter.gov.uk/ieListDocuments.aspx?CId=114&MId=7310&Ver=4
- Ban Box Shifting Campaign Ban Box Shifting