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The High Court (Charles Bagot KC) has dismissed a debt claim brought by the City of London Corporation against Principled Offsite Logistic Ltd, and in the process confirmed the ongoing effectiveness of the “intermittent occupation” model of rates mitigation.
Intermittent occupation is one of the most widely-used and well-established modes of rates mitigation for otherwise empty properties. The empty rate is payable by the owner of an unoccupied property, but only once the property has been unoccupied for a period of more than three months. If the property is re-occupied for more than 13 weeks (six weeks at the relevant time for the purposes of the judgment), then the three month period in which the owner is not liable is “reset”.
Intermittent occupation schemes work by bringing an otherwise empty property back into occupation at the end of the three month vacant period, occupying it for the period required to “reset”, and then vacating the property again. The pattern can be reproduced for as long as required, thus securing a significant rates saving for the property owner. In many cases, the occupation undertaken is slight in nature – it may involve the placement of boxes into the property, for instance.
City of London v 48th Street Holding Ltd & Principled Offsite Logistics Ltd [2025] EWHC 1130 (KB) concerned an intermittent occupation scheme run by POLL. It was common ground that POLL’s only purpose in placing its boxes into the property was to secure a rates mitigation effect, which is POLL’s own business purpose. The effectiveness of POLL’s scheme had previously been considered, and confirmed, by the Administrative Court (R (POLL) v Trafford Council [2018] RA 499).
The City contended that the Trafford judgment was wrongly decided, for two reasons:
The High Court rejected both of those grounds.
On the first ground, the Court accepted that, post-Hurstwood, the effectiveness of rates mitigation schemes must be assessed in light of the legislative purpose (without, however, descending into moral judgements on such schemes).
The purpose of the rating legislation is, however, much more nuanced than simply being about incentivising landlords to bring vacant property back into use. It was not obvious that intermittent occupation schemes were are automatically or necessarily contrary to the purpose of the rating legislation, and they may even bring benefits (para 86). It was important that, in 2024, the Government consulted on amending the legislation so as to render intermittent occupation schemes ineffective; but it declined to do so. The extension of the “reset” period from six to 13 weeks made intermittent occupation schemes less attractive; but it explicitly maintained their effectiveness (para 88). While Trafford did not consider the tax avoidance authorities, the outcome of the Trafford case was nevertheless consistent with those authorities (para 96).
On the second argument, the deputy judge agreed with and followed the Trafford approach that occupation can be beneficial for Laing purposes even where the value is the occupation itself. It does not matter that that benefit is not realised until the future resetting of the exemption period from the empty rate (para 114). The Court also acknowledged the difficulties caused by opening up an enquiry into the productiveness or value of an occupation of property (para 126), which would involve impermissible value judgments about intermittent occupation schemes (para 131).
The Court thus dismissed the City’s claim. The deputy judge also refused the City permission to appeal to the Court of Appeal, though it is open to the City to seek permission directly from the Court of Appeal.
A copy of the judgment can be found here.
Dave Forsdick KC and Kate Traynor appeared for the City of London. Dan Kolinsky KC and Luke Wilcox (instructed by Mills & Reeve) appeared for POLL.
