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Date: 29th Oct 2008

Business version of the poll tax proves unpopular

Last week's news that 200 of Britain's biggest property businesses had sent a letter to the Prime Minister demanding the restoration of empty rates relief came as no surprise.

The abolition of empty rates relief has not been business friendly and its introduction was met with widespread condemnation at the time. Developers argued that it would stop the redevelopment of vacant sites and the refurbishment of derelict property, eventually leading to the demolition of buildings and eyesores littering the country's skylines.

Make no bones about it - this is the business version of the poll tax. And like the unpopular tax of the late eighties, we can expect to see shouts of "can't pay, won't pay" across the country unless these rates are suspended, either in whole or in part.

This tax does not, as the government suggests, encourage landlords to let their buildings - lack of demand is often due to market conditions, which makes this a 'tax on failure'.

With the property market in freefall, and developers like David McLean going bust, the government should be doing all it can to avoid hitting people with further financial strain.

And to add insult to injury, rates collection has been badly managed - I have clients yet to receive rate demands from April 2008. This leaves businesses with the spectre of empty rates looming over their shoulder as they struggle to budget a cost which could come at any time.

Ironically, this follows Mandelson's plea to the banks, asking them to lend to small businesses and treat borrowers in arrears more leniently, rather than threatening repossessions. Perhaps it's time they led by example and removed this burden.