Relaxing the rules of a valuable tax break for empty offices would deliver a big boost to firms whose staff are all working from home due to Covid-19, a leading Aberdeen businessman said yesterday.
Eric Shearer, partner and head of the Granite City office of commercial property firm Knight Frank, said removing a requirement for premises to be unfurnished would be a “simple and sensible” step to help companies get through the crisis.
Workplaces are lying empty, with business conducted from kitchens, bedrooms and elsewhere in people’s homes.
Mr Shearer said: “Offices are unoccupied because the government told us to stay at home – great advice but these premises are obviously still fully furnished.”
It is a “Catch 22” situation, he said, adding the advice for people to work from home wherever possible and avoid non-essential travel meant removing furniture was not an option.
“We would probably be sent home and/or fined if we tried,” he said.
Calling for “leadership and clarity” on the rates relief, Mr Shearer said: “A simple solution would be to temporarily remove the ‘cleared of all moveable’ clause.”
A large number of Knight Frank’s Aberdeen clients, representing a variety of sectors, are keen to see this happen but afraid to “raise their head above the parapet”, he said.
The owners of unoccupied offices in Scotland can claim 50% relief from business rates for these properties for the first three months they are empty. They get a 10% discount after that.
Empty industrial properties attract 100% relief from non-domestic rates for the first six months and a 10% discount thereafter.
Listed buildings and properties with rateable values of less than £1,700 are eligible for full exemption for an unlimited period.
All businesses in the retail, hospitality and tourism sectors are eligible for a year’s 100% non-domestic rates relief under Scottish Government Covid-19 support measures.
Aberdeen City Council is one of a number of Scottish local authorities which says office and industrial accommodation must be unfurnished – “cleared of all moveable items” – in order for firms to claim the empty property reliefs. If they are not, they are classed as being used for storage.
Its website says an exception to the criteria may apply for “certain plant and machinery” in industrial buildings.
Moray Council also insists properties must be unfurnished, but the websites for Aberdeenshire, Highland and Argyll and Bute councils make no mention of this requirement.
Councils in the Western Isles, Shetland and Orkney have scant information about the empty property reliefs.
Highlands and islands MSP and shadow finance secretary Donald Cameron said: “If a property is unoccupied, then it’s entirely reasonable that businesses should enjoy the relevant relief that applies.
“But it’s simply impractical for firms to have to remove equipment and furniture during the pandemic due to public health restrictions, and in the interests of fairness, this strict condition must be relaxed, even temporarily.
“This is a national issue which the SNP government must take ownership of, and not just leave to the discretion of local authorities.”
Mr Cameron added: “Business owners are looking for clarity and consistency from the Scottish Government, and a clear sense that ministers understand that firms need to benefit from reliefs like these in order to simply survive.”
There is confusion between councils about whether they can grant empty property reliefs for firms whose staff are all working from home.
A government spokesman said they were available for “properties that are unoccupied as defined in statute and case law” but declined to comment further.