Box Shifting: Key Considerations for Property Owners
- 1 day ago
- 2 min read
A recent Court of Appeal ruling could have significant implications on business rates across England. In a new article published by Property Week, Partner Beth Margetson explores how the decision may affect business rates mitigation schemes, commonly known as "box shifting".
For many years, some property owners have used box shifting schemes to reduce their business rates liabilities on vacant commercial premises. The approach typically involves placing boxes or other items in an otherwise empty property for a short period, creating an occupation that resets eligibility for empty property relief.
In the article, Beth Margetson examines the Court of Appeal's decision in The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Limited & Anor, which challenges the effectiveness of these arrangements. The Court concluded that occupation carried out purely for rates mitigation purposes may not constitute a rateable occupation, despite earlier cases suggesting otherwise.
What Does the Judgment Mean?
The case decided whether occupation under a box shifting scheme provided sufficient value or benefit to the occupier. The Court found that occupation undertaken solely to generate a business rates saving lacked genuine value independent of the tax advantage being sought.
Beth explains how the Court concluded that arrangements designed purely to avoid rates liability may not achieve their intended result. She also considers the wider policy objectives behind empty property rates and the Government's desire to encourage the active use of commercial premises.
She discusses whether the ruling will ultimately bring an end to box shifting schemes, and if the case could yet be appealed to the Supreme Court.
Beth also reflects on the wider debate surrounding business rates reform. While local authorities will welcome a decision that could protect millions of pounds in revenue, the judgment raises important questions about whether the current business rates system remains fair and effective for owners of vacant commercial property.
Why Property Owners Should Pay Attention
Anyone currently using, or considering, a business rates mitigation scheme should take note of this decision. The judgment may require property owners to review existing arrangements and assess any potential exposure to business rates liabilities.
If you need advice on any vacant commercial property you own contact us on business.managers@djblaw.co.uk or call us on 0344 880 8000.
About Beth Margetson
Beth Margetson is a Partner at Davitt Jones Bould specialising in commercial property matters. She advises clients on a wide range of property issues and brings extensive experience of the legal and commercial challenges facing owners, investors, occupiers and public sector organisations. Beth is particularly interested in the evolving legal landscape affecting commercial real estate and regularly provides commentary on significant developments in property law.
