Business rates, empty properties and the placement of boxes

On 29 July 2026, the Court of Appeal (Bean, Falk and Holgate LJJ) handed down judgment in The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Limited and Principled Offsite Logistics Limited [2026] EWCA Civ 970.

This is the first time that the Court of Appeal has considered whether rate mitigation schemes involving the placing of boxes in unoccupied property with the sole aim of generating a subsequent period of empty property rate relief are effective and, in particular, whether the placing of those boxes constitutes “occupation” for the purposes of the statutory scheme.

Overturning the decision below[1] and holding that an earlier High Court decision considering the same scheme had been wrongly decided[2], the Court of Appeal ruled that s.45(1) of the Local Government Finance Act 1988 and regulations 4(a) and (b) and 5 of the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008:

“do not have the effect that the placement of items in an otherwise unoccupied hereditament amounts to occupation where the sole aim of doing so is to generate occupation for the purposes of those provisions, there is no commercial or business purpose save for rate mitigation, and the putative occupation is “beneficial” only due to the claimed rate mitigation benefits.” (J83)

The City of London (CoL) had challenged the decision below on two grounds. The first was that the Judge below had failed to apply the Ramsay principles[3] which meant (in CoL’s submission) that on a purposive approach to statutory interpretation, the placing of the boxes for the sole purpose of rate mitigation did not fall within the ‘class of facts’ to which regulation 5 of the 2008 Regulations was intended to apply. The second, was that the Judge erred in concluding that the Laing ingredients were satisfied in circumstances where the benefit needed to satisfy those criteria was dependent upon the benefit which arose from the operation of regulations 4a/5 of the 2008 Regulations (if engaged).

In the judgment delivered by Falk LJ (with which Bean and Holgate LJJ agreed), the Judge said she would not draw a distinction between those two grounds, but did address both in the analysis which followed:

• The legislature “cannot sensibly be taken to have intended” that ss.45(1) and 65(2) of the 1988 Act and regulations 4a and 5 of the 2008 Regulations should have the effect that temporary placement of items in an otherwise unoccupied property constituted “occupation” where the sole aim “is to generate occupation for the purposes of those provisions, there is no commercial or business purpose save for rate mitigation, and the putative occupation is “beneficial” only due to the claimed rate mitigation benefits” (J56). If the argument to the contrary was correct, then that would mean that the legislature in imposing a charge on unoccupied property with the aim of deterring owners from “leaving property unoccupied for their own advantage and encouraging them to bring empty property back into use for the benefit of the community at large”[4] had done so in such a way as to make two thirds of that charge optional (J54-55).
• As to s.65(2) of the 1988 Act, which provides that the question of occupation “shall be determined by reference to the rules which would have applied for the purposes of the 1967 Act had this Act not been passed”, that could only be a reference to the common law principles summarised as the four Laing ingredients (J57). POLL’s argument, that the placing of boxes for the purpose of rate mitigation would constitute occupation under those case law principles, did not take account of the Ramsay principle (J59) and the common law was not, in any event, frozen in time (J60).
• In terms of the requirement for there to be ‘beneficial occupation’ (Laing 3), pure rate mitigation occupation had no utility, value or benefit independent of the statutory scheme, and that benefit (in the form of a rate saving) was conditional on future events. That reinforced the Court’s conclusion that such activity could not constitute beneficial occupation for the purposes of the Laing test (J53-55). There was also some force in the submission that if pure rate mitigation occupation was sufficient that would render the third Laing ingredient redundant (J66). The Court’s analysis did not involve wrongly introducing a motive test. To the contrary: POLL’s own case required motive to be taken into account because it relied on occupation being beneficial by reference to its aim of mitigating rates and nothing else (J67).

The Court of Appeal made clear that the appeal – and its judgment – was specific to the pure rate mitigation scheme challenged in these proceedings. However, at J82, Falk LJ noted that:

“It is a well-established part of the Ramsay principle that a commercially irrelevant contingency or condition included in a scheme in order to secure a fiscal advantage can be ignored: see Inland Revenue Comrs v Scottish Provident Institution [2004] UKHL 52, [2004] 1 WLR 3172 at [23] (referred to in Rossendale at [12]) and UBS at [85]. The potential application of this aspect of Ramsay outside a tax context will need to be considered in due course.”

David Forsdick KC and Jacqueline Lean of Landmark Chambers appeared for the City of London, instructed by The Comptroller and City Solicitor. Kate Traynor appeared with David Forsdick KC in the High Court proceedings.

Dan Kolinsky KC and Luke Wilcox, also of Landmark Chambers, appeared for Principled Offsite Logistics Limited, instructed by Mills & Reeve LLP.

[1] [2025] EWHC 1160 (KB)

[2] R (Principled Offsite Logistics Ltd) v Trafford Council [2018] EWHC 1687 (Admin), [2018] RA 499

[3] W.T. Ramsay Ltd v Inland Revenue Commissioners [1982] AC 300 as restated in Barclays Mercantile Business Finance Ltd v Mawson [2004] UKHL 51, [2005] 1 AC 684

[4] At J31, citing Rossendale Borough Council v Hurstwood Properties (A) Ltd [2021] UKSC 16, [2022] AC 690 at paras. 22-27