Ban landlords ‘box shifting’ and prevent business rate evasion

The London Assembly is calling for a ban on ‘box shifting’ to free up empty commercial space and allow councils to collect more business rates.

The practice of box shifting – a form of business rates evasion and avoidance – is used by some landlords to claim three months’ empty rates relief after simply putting boxes in an empty commercial space and declaring it occupied for six weeks.

Business rates evasion costs councils in England and Wales an estimated £250m annually.

The London Assembly is today urging the Chair of the Assembly and the Mayor to write to the Department for Levelling Up, Housing and Communities to support the demands of the Ban Box Shifting campaign.

Siân Berry AM, who proposed the motion, said:

“Londoners regularly tell me they’re fed-up seeing so many local shops, offices and other community spaces in their area sitting empty. 

“Box shifting plays a harmful role in keeping these ‘dead spaces’ vacant, a legal loophole that allows landlords to claim three months’ empty rates relief by simply putting boxes in an empty commercial space and declaring it occupied for six weeks.

“That kind of evasion and avoidance is costing local authorities about £250 million per year. I am glad to see Assembly Members join me in calling on the Mayor to support the Ban Box Shifting campaign.”

Leónie Cooper AM, who seconded the motion, said:

“Box shifting costs councils millions and deprives our local communities of much needed cash that would help high streets flourish.

“The Government should follow Wales’s example and ban this shifty method of business rates evasion and avoidance.”

The full text of the motion is:

This Assembly notes that:

• Business rates evasion and avoidance, exemplified by tactics such as ‘box shifting’, costs councils in England and Wales an estimated £250 million annually while preventing space from being used productively.
• The practice of box shifting is used by some landlords to claim three months’ empty rates relief after simply putting boxes in an empty commercial space and declaring it occupied for six weeks.
• Ending this practice will not only allow councils to collect more business rates, but will also support ethical rates mitigation options, such as offering rent-free spaces to charities and community organisations.
• Scotland and Wales have already passed legislation to address this issue, and the Government has recently conducted a consultation into business rates avoidance and evasion with the results yet to be published.
• Between 2019 and 2021, London saw a 2.4 percentage point rise in empty shop and leisure units from 8.3 to 10.7 per cent.

This Assembly therefore calls on the Chair of the Assembly and the Mayor of London to write to the Department for Levelling Up, Housing and Communities to recommend it supports the demands of the Ban Box Shifting campaign.