BIFA: U.K. unoccupied property tax unfair to supply chain industry
The British International Freight Association is urging the U.K. government to reconsider a tax on unoccupied property that is hurting the bottom lines of shippers and logistics companies.
“From April 1, 2008, empty warehousing became liable for normal business rates after six months of being unoccupied,” BIFA said in a statement. “Offices started clocking up business rates after just three months of being unoccupied. Warehouses, which were empty at the time of the rule change, are now liable to business rates that can often run into hundreds of thousands of pounds.”
The government had sought to increase churn in the property market by persuading property owners or landlords to offload empty properties to new buyers and tenants, but as BIFA Director General Peter Quantrill put it, “this move has backfired, as there are few buyers for these premises in the current economic climate.”
BIFA argues that those involved in goods movement are “natural owners and users of warehousing in order to receive and store clients' cargoes. Peaks and troughs in supply chain activities mean that this warehousing can sometimes lie empty for periods between peak flows.”
BIFA stressed that demolition of unoccupied warehouses due to excessive taxation could hurt the country economically when demand picks back up, as there would be a shortage of warehouse space.
“Already, there are many reports that some industrial landlords are demolishing significant warehousing capacity that, given the current economic disturbances, is lying empty with little chance of being used in the immediate term,” the statement said. “The permanent removal of this capacity means there could be significant storage shortages when the upturn comes.”
