A major business rates mitigation strategy involving the temporary occupation of empty commercial property has been rejected by the Court of Appeal, changing the position for landlords and property owners who rely on artificial occupation to reset Empty Property Relief.
In City of London v 48th Street Holdings Ltd and Principled Offsite Logistics Ltd, the Court ruled on 29 July 2026 that placing boxes with redundant contents into otherwise empty premises, solely to create a period of “occupation” for business rates purposes, did not amount to genuine rateable occupation.
The decision overturns an earlier High Court ruling and concludes that the 2018 POLL v Trafford decision, which had supported this type of arrangement, was wrongly decided.
The Scheme Briefly
The arrangement was promoted by Principled Offsite Logistics Limited, known as POLL. Boxes were placed inside empty commercial premises for the minimum occupation period then required. Once that period ended, the boxes were removed, and the property owner sought a fresh period of Empty Property Relief.
Key figures recorded in the case include:
- POLL claimed to have saved clients more than £500 million through the scheme.
- The arrangement could reduce the overall rates of liability by around two-thirds if repeated.
- The City of London estimated that this scheme and similar variants cost around £35 million a year in lost revenue.
- The parties agreed that the boxes had no separate commercial purpose beyond creating the claimed rates of saving.
That final point became central to the Court of Appeal’s ruling.
Why the Judgment Matters
The decision is particularly important for owners of vacant commercial property in England who use short-term occupation arrangements mainly to restart Empty Property Relief.
The Court did not say that every temporary occupation is ineffective. Genuine commercial occupations can still qualify depending on the facts.
However, the ruling makes it much harder to rely on arrangements where there is no real business purpose behind the occupation, and the only benefit is the rate savings themselves.
Property owners should therefore avoid assuming that placing goods, boxes or low-value material inside otherwise empty premises will automatically create valid occupation for business rates purposes.
Failure to comply may lead to problems with billing authorities and claims for unpaid business rates if a mitigation agreement proves ineffective.
The Rules Have Tightened Too
The wider Empty Property Relief rules have already changed.
A property will be considered reoccupied, and a new Empty Property Relief period can commence, after at least 13 weeks starting on 1 April 2024. Previously, the reset period was six weeks.
Most empty commercial properties can receive three months of full relief, while qualifying industrial premises can receive six months. From then on, rates will be payable in full unless an exemption or relief is granted.
What Property Owners Should Check Now
Business ratepayers who are, or are considering, using business rates mitigation arrangements should check:
- Whether the property is being used for a genuine commercial purpose rather than solely to obtain rates of relief.
- Whether any reoccupation satisfies the current 13-week requirement.
- Whether an existing arrangement depends on the old box-shifting model or the previous six-week rule.
- Whether there could be historic or future exposure if a billing authority challenges the arrangement.
Existing schemes should not be treated as automatically effective simply because they followed a previously accepted structure.
Lanop can help property owners and businesses review their current business rates position, assess potential financial exposure and understand whether an arrangement remains commercially and legally defensible.
With both the rules and the case law moving against artificial occupation models, getting the position reviewed before relying on a mitigation strategy can help avoid unexpected liabilities later.
