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Retailers pay charities to avoid rates

29 November 2011

In our post on 8 November we highlighted that some high street stores in depressed areas are being let for £1 allowing landlords to avoid business rates on vacant units. There are now reports that some landlords and listed retail groups are paying charities to occupy their vacant units and exploiting their charitable status giving discounts of up to 100% on liability for rates. Donations are seen as cheaper than paying rates. However, some charities are not even occupying the shops and are just placing posters in the windows. Hilary Benn, shadow communities secretary, has called on local authorities to investigate. His view is that placing posters in an otherwise empty shop should not qualify for rate relief.

Business rates on the high street is an increasingly contentious issue and we’ll have to see how the government reacts once Mary Portas’ report is published.

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