Business Rates
Important Rating Update: Court Ruling on Temporary Occupation Schemes
Court Ruling on Temporary Occupation Schemes
As you will be aware, temporary occupation schemes are widely used across the country as a means of mitigating Business Rates liabilities on empty properties.
The Court of Appeal has now handed down a significant judgment that changes the legal landscape for these arrangements. We write to set out the key points arising from this decision and what they mean in practice.
The full Court Judgment can be accessed here.
The decision
The Court of Appeal has issued their decision in City of London v 48th Street Holdings Limited and Principled Offsite Logistics Limited [2026], finding in favour of City of London.
This overturns a 2018 case (POLL v Trafford) that had underpinned most temporary occupation schemes operating in England. That case had established it was sufficient for the only benefit of an occupation to be Business Rates savings, even where goods of no value were being stored.
This latest decision reverses that position and finds that there must be a genuine benefit to occupation aside from any empty rates savings in order for these schemes to be effective.
Why this decision is different
This is a significant departure from all previous court decisions on temporary occupation.
Firstly, the Court concludes that there must be a benefit to any occupation taking place, aside from rates saved. In effect, there must have been a reason for the occupation to take place other than for the purposes of mitigating Business Rates.
Further, the decision also confirmed that courts are likely to now consider what Parliament intended Rating legislation to achieve and not just whether a set of legal conditions has been technically satisfied. This point could have wider implications for other forms of mitigation that involve artificial or contrived arrangements that are undertaken solely for the purposes of generating Business Rates savings.
What this means in practice
Moving forward, any temporary occupation arrangement where the items stored have no genuine commercial value and the occupation serves no purpose other than generating savings is likely to be ineffective.
We suspect that POLL will make an application to appeal the decision to the Supreme Court, this may include a request for a stay on any enforcement action. Regardless, our advice would be not to engage in any mitigation activities where a benefit to the occupation cannot be demonstrated besides rate savings.
We will continue to provide updates on this matter as more information becomes available.
CBRE solutions
Our solutions involve the occupation of property with goods of value and that also have commercial benefit, which is fundamentally distinct to the circumstances considered in this latest case decision.
If you would like to discuss how this decision affects your specific circumstances, please get in touch below.
