Concern over tax incentives for renovating empty premises
The Government has set out plans to expand the scope of regeneration zones to provide businesses with tax incentives to renovate their properties.
Some experts fear, however, that the Business Property Renovation Allowance scheme could have the effect of giving businesses in deprived areas an incentive to keep premises empty.
Under the scheme, firms in the chancellor’s 2,000 ‘enterprise areas’ would be able to claim the full cost of property renovations against tax, but only if the business property has been empty for more than a year.
A consultation on the scheme was launched as part of chancellor Gordon Brown’s pre-Budget report last week by the Inland Revenue, outlining the plans which are due to be made law by the end of next year.
Chris Brown, chief executive of the Igloo regeneration fund said:
‘This plan is likely to produce a number of perverse effects, particularly if it’s going to mean people keep a property empty simply to qualify for an allowance. It could stop people from re-developing and rebuilding, encouraging them to renovate instead.”
The consultation, which will end on 1 March next year, specifically asks for comments on whether respondents think the measure may encourage businesses to leave premises empty.
Source: Regeneration magazine