Empty property rates amendments for administrators
Amendments are to be introduced to rates legislation in England and Wales and Scotland extending the exemption for empty property rates to companies in administration.
Concern had been raised following the Trident decision (Exeter City Council v. Bairstow & Ors, Re. Trident Fashions plc) that companies may be forced to go into liquidation as opposed to administration simply to avoid having to pay rates. Although the Trident decision is not binding in Scotland, as it was a decision of the High Court, it is thought likely to be persuasive to a Scottish court should a similar case be brought before it.
The rating legislation for England and Wales and Scotland is different, and changes in Scotland will have to be introduced by the Scottish Parliament. Agreement has now been reached for changes to both sets of legislation to be introduced, probably in the Spring of 2008.
This important change will mean that the rates position will be the same whether the company goes into liquidation or administration. In both cases if a property is unoccupied no rates will be paid. If on the other hand the company is occupying the property (whether or not it is trading) business rates will be payable.
FOR FURTHER INFORMATION PLEASE CONTACT: GORDON HOLLERIN
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