Box shifting estimated to cost councils £250m annually which is equivalent to the cost of building 2,000 council homes, 150,000 hospital beds, or 12 secondary schools.

An open letter penned by the campaign against business rates avoidance, Ban Box Shifting, has now received over 100 signatures from MPs and councillors across England, including Fleur Anderson, the Labour MP for Putney, and Siân Berry, a member of the London Assembly and former co-leader of the Green Party. The open letter, which calls on the Government to address rates avoidance and promote ethical rates mitigation, follows the Government's Business Rates Avoidance and Evasion consultation, which highlighted ‘a small minority who seek to exploit the business rates system, either through false reporting, or through contrived means which circumvent the spirit and intention of the law.'

In November 2023, The London Assembly passed a motion 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.

Landlords can exploit a legal loophole in business rates relief by placing boxes in an empty commercial property to claim the space is occupied for six weeks. The boxes are then removed, and the landlord gets three months of empty rates relief. This cycle is repeated to maximise financial benefits, whilst adding little or no social value and means local councils are losing over two-thirds of their rates income every time the cycle is repeated. This has been estimated to cost councils £250m annually: equivalent to the cost of building 2,000 council homes, 150,000 hospital beds, or 12 secondary schools.

With one in five councils on the brink of bankruptcy in 2024, business rates avoidance can be a key contributor. Last year, Birmingham City Council cited a ‘dramatic reduction in business rates income' following its bankruptcy, and ending business rates avoidance is crucial to ensuring councils can stay afloat.

By extending the occupation period required for rates exemption from six weeks to six months, as has been done in Wales, the Government can ensure that councils do not lose out on money that would otherwise go to vital public services, and safeguard households, particularly residents with complex needs, during an economic crisis.

Ethical rates mitigation, which involves providing rent-free spaces to charities, offers a sustainable solution that benefits local communities, landlords, and charities. This approach is championed by Ban Box Shifting and is recognised by business rates departments and is used by some councils' estates teams as a means to save money and support communities, while benefiting landlords through lower security and insurance costs and a higher likelihood of re-letting.

The Ban Box Shifting campaign, launched in September, is spearheaded by Shaylesh Patel, Founder of Temporary Use Aid, which works with charities and landlords to make the best use of vacant spaces.

Shaylesh Patel, Founder of Ban Box Shifting, said: "Almost 60 councils have recently declared being at risk of bankruptcy, and have been cutting public services for years now, with many councils only able to spend on essentials. This is severely detrimental to the wellbeing of residents across the country and stamping out business rates avoidance is necessary to keep councils afloat. Indeed, every property should be paying business rates, so business rates income for councils should be predictable and steady. Any significant drop in income that councils see is largely attributed to rates avoidance.

"It is promising to see that the Government has acknowledged this issue with its Business Rates Avoidance and Evasion consultation last year, and we are pleased to see MPs and councillors across all parties back our open letter calling for change, showing the commitment of all parties to tackling rates avoidance and work towards an equitable solution for landlords, business owners, and residents."

For more information please visit Ban Box Shifting