The Court of Appeal has delivered a landmark ruling against a widely-used business rates avoidance scheme, saving councils millions of pounds in lost revenue.
The case centred on a ‘box-shifting’ scheme operated by Principled Offsite Logistics (POLL), a specialist rate mitigation company that claimed to have saved its clients over £500 million. The scheme involved placing boxes of worthless items in vacant commercial premises for six weeks to reset the clock on empty property relief, allowing landlords to claim a further three-month exemption.
This cycle could be repeated indefinitely, reducing business rates liability by around two-thirds. The City of London Corporation, which brought the case, estimated the scheme was costing it £35 million annually in lost revenue.
Overturning an earlier High Court decision that had upheld the scheme, Lady Justice Falk ruled that Parliament could not have intended such arrangements to count as genuine occupation. The judgment found that placing boxes with ‘redundant contents’ served ‘no commercial or business purpose save for rate mitigation’ and that the supposed benefit came only through circular reasoning.
The Court overruled the 2018 case of POLL v Trafford, which had previously suggested that “occupation for its own sake” was sufficient to qualify for relief.
The Government has since urged local authorities to review existing ‘box-shifting’ arrangements and withdraw relief where appropriate. However, the Court made clear that genuine storage arrangements,where items have practical utility beyond rates avoidance, remain unaffected. An application for permission to appeal to the Supreme Court has been lodged.
Photo: SHVETS production
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