THE council leader has defended changes which mean fewer tax exemptions for residents and businesses who own empty buildings in North East Lincolnshire.
A report by the Tax Payers' Alliance has revealed North East Lincolnshire Council (NELC) collected £1,928,588 in business rates on empty buildings in the 2011-2012 financial year – a rise of £638,298 on the previous year.
Empty industrial properties were previously exempt from business rates and commercial buildings had a six-month exemption and a 50 per cent reduction thereafter. In the 2011-2012 year, NELC, which now has the power to change exemptions, changed the rules, giving a three-month exemption for commercial and six months for industrial properties, after which they must pay business rates in full.
Lawrence Brown, partner at Scott's Property, which markets commercial units, said it was "an unfair tax which discourages property development" in an already challenging market.
The report comes as changes to council tax also reduce the six-month exemption homeowners have when properties lie empty to just one month for empty and unfurnished houses – meaning landlords will be hit unless they can replace tenants who move out within a month. Homeowners who have structural work done, previously exempt for up to 12 months, will now receive a 50 per cent reduction.
But Councillor Chris Shaw , leader of NELC, has defended the policies which he claims are the result of cuts in the grants given to local councils from Central Government.
Business rates are decided by Government policy, but this year will go directly to the councils who collect it, instead of Whitehall.
Council tax has always been decided by NELC, but this year, it is facing a 10 per cent cut in the amount of funding available for council tax benefit.
He said: "Businesses and homeowners may feel hard done by, but due to Government cuts, we were faced with passing on the cost to them, cutting services or cutting funding for the vulnerable."
View the full Tax Payers' Alliance report
.