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Revealed: How much do empty businesses in Redbridge cost the taxpayer?

PUBLISHED: 07:00 16 January 2020 | UPDATED: 15:16 16 January 2020

Bodgers in Ilford closed at the end of February 2018. Empty business properties do not have to pay business rates tax for three months. Picture by Ellie Hoskins

Bodgers in Ilford closed at the end of February 2018. Empty business properties do not have to pay business rates tax for three months. Picture by Ellie Hoskins

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Empty businesses in Redbridge are costing taxpayers an average of £1.7million in lost business rates each year due to a national relief scheme.

Bodgers on the last day. Picture: Ellena CruseBodgers on the last day. Picture: Ellena Cruse

From Bodgers in Station Road, Ilford to Toys R' Us in Horns Road, Newbury Park, businesses big and small have closed in Redbridge over the past year.

These empty shops, offices or warehouses do not have to pay business rates for three months and are subject to a tax relief which allows for property investment.

It also gives landlords time to find a new occupant.

Over the past five years in Redbridge, £8.6million of potential business rates income has been lost due to empty premises.

In 2018-19, landlords in the borough were exempt from paying £1.8million of rates under the national relief scheme and the council collected around £56million in rates for all businesses.

The amount paid out in relief amounted to 2.5 per cent of the total rates payable in that area.

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It's important to note that councils do not get to keep all of the rates revenue they collect as central government usually takes a sizeable share.

Next year expects to be better for Redbridge, which is forecast to lose around £770,000 in rates relief which is about a 1pc loss.

Out of 6,740 taxable business units in the borough, the council told the government 510 (7.6pc) need empty premises relief.

According to figures from the BBC, the cost to the taxpayer of empty businesses has now risen to more than £1billion a year across England and Wales.

The government has promised some councils 75pc retention of any growth in business rates from April 2021.

A Redbridge Council spokeswoman said: "Empty Property Relief is a statutory reduction in the amount of business rates payable because a property is empty.

"It's not something the council has control over as it's relief businesses are legally entitled to.

"We regularly conduct checks on empty properties to ensure that the relief is only awarded to those entitled to receive it, and to maximise the income due to the council.

"Whilst awarding the relief will cause a temporary drop in income for a small period of time, we are keen to support businesses in Redbridge, and often the statutory relief being claimed is for the redevelopment of premises or the introduction of a new business in the borough, which can lead to new amenities and services from which residents would benefit."

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