Vacant Rates Update
At the November 2025 Landmark Chambers Annual Rating Conference, Tim Morshead KC, who is widely considered as the UK’s leading Counsel on rating matters, suggested that in his opinion the way to render third-party operated vacant rates mitigation schemes legally inoperable, would be to extend the Ramsay Principle. The well-known tax principle, as Tim suggested, was only “lightly applied” by the Supreme Court in closing down two such schemes.
In attacking any scheme, one of the key questions to ask is “What is the commercial benefit derived from the occupancy other than the fees made from mitigation, i.e. is there a genuine commercial purpose outside of simply mitigating the rates?” Like Tim, it has long been our opinion that if attacked using the full weight of Ramsay, current vacant rates mitigation schemes would be likely to fail.
It is widely opined that the Court of Appeal (CoA) will hear the well-publicised appeal against the recent High Court Principled decision. If it does, the Ramsey arguments will centre on exactly what commercial benefits Principled derives outside rates mitigation by storing valueless palletised items. We cannot see how there is any commerciality outside rates mitigation – the educated consensus is that the Principled decision will be overturned by the CoA. In our opinion running the same Ramsay arguments would also see the closure of a plethora of Bluetooth schemes.
Furthermore, there is no need to pay a third-party provider where the landlord has items of their own that they decide to store – they can benefit from doing so in their own property and are on far safer ground – solidly underpinned by case law in Macro and Public Health England. Obviously, landlords would not therefore pay the 20-30% providers’ fees and bar the associated soft costs, would save 50% on their vacant rates.
Since the Supreme Court Summary Judgement, it has been our general advice to use rates mitigation only as a last resort. If commercially practical it is far safer to strip back to shell and get the property delisted, but clearly this has major limitations. For those landlords that for a multitude of reasons needed to mitigate, we have provided them with the logistical means to occupy using their own materials, taken responsibility for all LA/BA correspondence, including evidential photographs of occupation and vacation etc, for a minimal fee.
Many landlords do not have the either the necessary materials or inclination, so as an alternative we have provided our own intermittent occupation scheme. Whilst not actually using Bluetooth technology, our more tangible Free Wi-Fi scheme is underpinned by the same case law, and to date has been 100% effective. Nonetheless this would also be likely to fall foul of a full-on Ramsay attack.
New Scheme Introduction and Background
Mothball’s Scheme 3 was subject to proceedings in the High Court and Court of Appeal where we had resounding successes in both. Scheme 3 was never party to the Supreme Court strike out application, notwithstanding that we believed elements in their Summary Judgement could have impacted on its efficacy. Consequently, following the Judgement, we took the decision to cease taking on new clients and leases into Scheme 3. However, all leases already in place for clients successfully remained in place and effective for the three-year term!
The changes in working practices in the aftermath of the pandemic, together with an adverse economic climate, have markedly increased the amount of vacant office properties, once again causing potentially long-term challenges. With the reduced nett savings that intermittent occupation mitigation schemes now deliver, many of our clients have asked us to try to address this. The catalyst to do this came from an unlikely source, i.e. the only competitor who successfully cloned our MVL process, having launched a hybrid process with a strong legal opinion suggesting it overcame the SC Judgement challenges. However the opinion fails to cover any extension of the Ramsay argument, but it did get our cerebral juices flowing.
We’re pleased to announce that after months of painstaking re-engineering, we now have a totally new solution!
1. It’s Ramsay proof – delivering quantifiable commercial benefits to both landlord and tenant outside of vacant rates mitigation and is completely transparent.
2. It delivers 65-75% nett savings (inclusive of all fees) of the vacant rates payable by the landlord, as a by-product.
3. It increases ESG credentials.
Our solution is not a panacea but is a pragmatic solution to a wide range of vacant property challenges – for more information email a request for a call back or call us.
