Lawbite: Court of Appeal outlaws business rates box shifting scheme

The Court of Appeal has closed down a popular business rates avoidance scheme.

This decision applies to business rates law in England. The court ruled that storing boxes of worthless items in vacant offices does not amount to genuine occupation. This means the scheme no longer works to reduce business rates bills.

The ruling matters most to commercial landlords, property owners, rating surveyors and real estate lawyers who deal with empty property relief. 

What was the scheme?

The case concerns offices at 2 America Square in the City of London. The building’s owner, 48th Street Holdings Limited (48th Street), used a business rates mitigation scheme designed by Principled Offsite Logistics Limited (POLL). 

POLL took a short lease of the empty units and placed boxes of worthless items inside for six weeks. It then left, and 48th Street claimed a fresh three month rates exemption. The cycle repeated, cutting the rates bill by around two thirds.

Did it work?

The City of London Corporation (the City) argued the scheme created no real rateable occupation. A Deputy High Court judge disagreed in May 2025. He followed an earlier case called POLL v Trafford and dismissed the City’s claim. The City then appealed to the Court of Appeal.

The Court of Appeal has now overturned that decision and overruled POLL v Trafford.

It ruled that occupation must have genuine value or benefit, not just the rates saving itself, in order to amount to rateable occupation.. The court relied on Rossendale, a 2021 Supreme Court case on a different rates mitigation scheme. Courts must read rates law purposively, so arrangements with no purpose other than avoiding a charge should not succeed.

Key points

• the court has ruled that “pure” rate mitigation schemes, which use worthless items to generate occupation and claim empty property relief, no longer work
• schemes that involve the storing of genuinely useful items, such as records a business must keep, may still succeed, following earlier decisions such as Makro v Nuneaton BC and Public Health England v Harlow. Essentially, there needs to be some purpose to the occupation other than purely seeking to avoid or mitigate business rates 
• it is possible the matter might be appealed to the Supreme Court. We may not have heard the last of this matter yet.
• we expect further disputes about where the line falls between a “pure” rate mitigation scheme and a genuine storage arrangement, so specialist advice is essential

What should you do now?

• review any live rate mitigation arrangements with your rating adviser now
• check whether any stored items have a genuine business purpose beyond rates saving
• assess potential exposure to backdated business rates claims from billing authorities
• take specialist advice before entering into or continuing any rates mitigation scheme