A new campaign, End Rates Avoidance (ERA), is calling on the UK Government to follow the lead set by Wales and Scotland in tackling business rates avoidance.
The campaign is calling on the UK Government to close a series of loopholes that allow some property owners and occupiers to avoid paying business rates. The UK Government has issued a consultation on business rates, with the deadline to submit views this week.
ERA argues that rates avoidance tactics curb and delay investment; create an uneven playing field, placing a greater burden on businesses that comply fully with their obligations while others exploit technicalities to reduce or eliminate their liabilities. It also warns that persistent avoidance weakens the financial stability of local authorities, limiting their ability to plan long-term investment in essential services.
The campaign is led by Shaylesh Patel, founder and CEO of ethical rates mitigation consultancy ASTOP, and follows the Ban Box Shifting Campaign he launched last year with partners and charities, which highlighted the rates avoidance method and was backed by around 100 councillors and MPs.
ERA said that Wales and Scotland have both taken legislative steps to address rates avoidance, setting an example that ERA is urging England to follow.
However, it warned that significant loopholes remain, saying that Welsh councils continue to lose nearly £9 million annually to schemes that exploit technical exemptions.
The campaign said that the cost in Flintshire was more than £530,000, Carmarthenshire more than £430,000, in Pembrokeshire more than £470,000 and Newport more than £520,000.
Among the most commonly cited forms of business rates avoidance is box shifting, ERA said. This involves placing a small quantity of goods, storage crates or other token items inside a vacant commercial property for a short period in order to create the appearance of occupation. Once this brief occupation is established, the property can qualify for a further period of empty rates relief after it is vacated again. By repeating this cycle, some landlords and operators are able to significantly reduce their rates obligation while the premises remain effectively unused.
Other schemes rely on technical interpretations of qualifying use. So called snail farms, for example, involve installing minimal equipment and a small number of snails to claim that a property is being used for agricultural purposes, and claim 100% exemption from business rates. Similarly, some premises have been temporarily designated as places of worship, allowing owners to claim charitable or religious exemptions even where the use is not safe, short lived or nominal.
ERA is urging ministers to adopt a revised six-point manifesto setting out practical measures to curb avoidance and promote fairer use of the system.
The manifesto calls for:
- Extending the period of genuine, continuous occupation required to trigger rates exemption to six months, preventing short-term or token use designed solely to obtain relief.
- Strengthening powers to ensure empty rates relief is granted only in legitimate and deserving cases, including enhanced oversight or independent guidance to support councils in applying anti-avoidance measures.
- Introducing a one-year upper limit on properties left in limbo due to insolvent tenants, so that liabilities are restored or spaces are reactivated more quickly.
- Closing the “snail farm” loophole and similar arrangements that claim agricultural exemptions in clearly non-agricultural premises.
- Closing the “fake place of worship” loophole by ensuring that only genuine, independently verified places of worship qualify for exemption.
- Promoting ethical mitigation by supporting genuine charities to occupy vacant premises, ensuring any relief granted benefits community use while protecting public funds.
Shaylesh Patel, founder and CEO of ASTOP, said:
“Wales has shown that action on business rates avoidance is possible, but the job is not done. Welsh councils are still losing nearly £9 million every year: money that could fund 59 council homes or more than 4,400 hospital beds. From Wrexham to the Vale of Glamorgan, councils continue to see revenue drained by avoidance schemes. We launched the End Rates Avoidance campaign to call for further reform, both in England, where the problem costs councils £250–300 million a year, and across the wider UK, to ensure the system is transparent, responsible, and equitable for everyone.”
