Rates Mitigation Scheme utilising short leases found valid (The Mayor and Commonality and Citizens of The City of London v 48th Street Holding Ltd and another company)

Article summary

Local Government analysis: This case involves what the court described as the latest in the history of ‘creative attempts’ in devise schemes to reduce business rate liability, utilising the provisions under the Regs 3 and 4a of the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (SI 2008/386) allow an exemption period for three months on an empty property but not thereafter. However, the regulations offer a potential means of circumventing the imposition of liability by providing that if an empty property was occupied for more than six weeks, and then once more became unoccupied, a fresh three-month rates exemption period could be triggered. The Rates Mitigation Scheme (RMS) utilised by the first defendant involved granting leases to the second defendant to occupy the premises, with a successive series of short leases raised as underpinning a claim for repeated exemptions of three months to apply...