The Government has announced additional business rates support for pubs, clubs and live music venues, while the Court of Appeal has delivered a landmark judgment that significantly restricts the use of empty property mitigation arrangements. Together, these developments highlight a continuing shift in the business rates landscape, with policymakers seeking to target relief more selectively and the courts taking a tougher stance on arrangements designed to reduce liability.
Additional support for pubs and live music venues
The Government has confirmed a further 20 percent business rates relief for pubs, clubs and live music venues. The measure will be welcomed by a sector facing continuing cost pressures, but it raises a key question: how will the relief be funded?
The introduction of the 2026 Rating List saw new multipliers designed to reduce the burden on many Retail, Hospitality and Leisure (RHL) properties, funded by higher charges on properties with rateable values above £500,000. However, many larger RHL properties were themselves caught by the higher multiplier, reducing the intended benefit.
The latest announcement may indicate a continuing move towards a more targeted business rates system in which some sectors receive increased support while others bear a greater share of the cost. Suggestions have also been made that larger distribution warehouses, online retailers and businesses perceived as providing limited community benefit could face higher charges in the future.
Why does this matter?
Businesses should consider whether future reforms may affect their occupational costs, even if they are not direct beneficiaries of the latest relief measures. Any move towards sector-specific reliefs or surcharges could create additional complexity and potentially alter investment and occupancy decisions.
For property owners and occupiers, understanding how the Government intends to fund future reliefs will become increasingly important as the next revaluation cycle approaches.
Court of Appeal ruling on empty property mitigation
A separate and potentially more significant development is the Court of Appeal's decision in The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Ltd and Principled Offsite Logistics Ltd [2026] EWCA Civ 970.
The case concerned a widely used empty property mitigation arrangement known as 'box shifting'. Under these arrangements, empty properties were occupied temporarily with stored items to satisfy the requirements for occupation and trigger a fresh period of empty property relief.
The Court of Appeal ruled that occupation undertaken solely to obtain rates relief did not amount to beneficial occupation for rating purposes. In doing so, it overturned many years of established practice and case-law that had supported the use of such arrangements.
The decision is expected to have a significant impact on landlords and investors holding long-term vacant properties, particularly in areas where tenant demand remains weak. Many arrangements that have historically generated substantial savings may no longer be effective.
What action should businesses take?
Landlords, investors and occupiers should review any existing or planned empty property mitigation arrangements in light of the judgment and assess the potential impact on future liabilities.
More broadly, both developments point towards a business rates system that is becoming increasingly interventionist. Reliefs are being targeted more selectively, while the scope for mitigating liabilities appears to be narrowing.
For businesses with significant property holdings, now is an appropriate time to revisit business rates strategies, model future liabilities and engage with advisers on how further reforms could affect property costs and investment decisions. Please contact the authors if you would like to discuss business rates issues.
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