The Ministry of Housing, Communities and Local Government has told English billing authorities to revisit 'box-shifting' business rates cases after a Court of Appeal ruling, in a business rates information letter published on 3 September 2026. The same letter reminds authorities that the 2025-26 New Burdens Assessment collection is already live. (gov.uk)
The appeal arose from a rate mitigation arrangement used on vacant office space in the City of London. At the time relevant to the case, an owner could reset empty property relief after six weeks of qualifying occupation, and the scheme sought to do that by placing boxes with redundant contents in the premises before removing them and claiming a further three months of relief. (caselaw.nationalarchives.gov.uk) That timing point matters. Since 1 April 2024, the reset period in England has been 13 weeks rather than six, but the Court of Appeal's reasoning still matters because it goes to a more basic question: whether this kind of temporary use counts as occupation at all for rating purposes. (caselaw.nationalarchives.gov.uk)
In The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Limited & Anor, the Court of Appeal allowed the City's appeal and said the earlier High Court authority in POLL v Trafford should be treated as wrongly decided. The court held that placing items in an otherwise empty rateable property is not occupation where the sole aim is to trigger relief, there is no commercial or business purpose apart from rate mitigation, and the supposed benefit exists only because of the hoped-for rates saving. (caselaw.nationalarchives.gov.uk)
The legal significance lies in the court's approach to statutory purpose. Drawing on the Supreme Court's Rossendale ruling, the Court of Appeal said the Ramsay principle applies in rating cases and can defeat arrangements whose only real function is avoidance. It also said 'beneficial occupation' still requires some use, value or benefit independent of the statutory scheme itself; occupation cannot become qualifying occupation merely because it may produce a fiscal advantage. (caselaw.nationalarchives.gov.uk)
For billing authorities, the operational message from MHCLG is direct. Councils should review box-shifting schemes, and other arrangements where the object of the occupation is rates avoidance, and withdraw relief where they conclude there is no qualifying occupation. The department also said it is working with local government partners on further steps to tackle rates avoidance through litigation and other measures. (gov.uk) The sums involved help explain the urgency. The Court of Appeal recorded POLL's claim that it had saved clients more than £500 million through the scheme, while the City of London estimated that the scheme and its variants were costing it £35 million a year in lost revenue. (caselaw.nationalarchives.gov.uk)
The judgment does not automatically resolve every minimal-occupation case. The Court of Appeal drew a distinction between the 'pure rate mitigation occupation' before it and other arrangements, and the judgment notes that the Ramsay analysis may extend beyond that category in future cases. That suggests authorities will still need to examine the facts of each claim rather than treat every short occupation as invalid by default. (caselaw.nationalarchives.gov.uk)
The administrative reminder in the letter is separate but material. The 2025-26 New Burdens Assessment collection, first signalled in the business rates information letter issued on 26 November 2025, was released on the DELTA platform on 21 August 2026 and remains open until 18 September 2026. At Budget 2025, the department said it would assess and meet reasonable software, staffing and administrative costs falling on local authorities from implementing the new business rates measures. (gov.uk) Under government guidance, a new burden is broadly any policy or initiative that increases the cost of providing local authority services, and those net additional costs should be assessed and properly funded by central government. For finance teams, that makes the DELTA return the evidential basis for recovering implementation costs rather than a routine data exercise. (gov.uk)