Anyone managing vacant commercial space will almost certainly have come across box-storage rates mitigation schemes. The mechanics are straightforward: at the end of the initial three-month empty property rates relief period, a specialist company takes a short-term, low-value lease of the premises (usually with a short-term break clause), “occupies” the premises by storing boxes for the duration of the reset period, and then exits, triggering a fresh claim for relief. Repeat the cycle, and the owner’s rates bill is reduced to the short reset windows only. It’s been a popular way to cut holding costs on vacant space for years.
It appears that this approach no longer holds up.
What’s changed?
In The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Ltd & Anor [2026] EWCA Civ 970, the Court of Appeal has ruled that this type of scheme simply doesn’t work. The case involved leasehold premises in America Square, London, where the owner had engaged Principled Offsite Logistics Ltd (POLL) – a company that provides exactly this kind of rates mitigation service. POLL took successive short-term leases, stored boxes on the premises for the then-applicable six-week reset period, and ended the leases to trigger a new relief claim.
The court applied a long-standing legal rule known as the Ramsay principle – in plain terms, if the core purpose of an arrangement is to avoid a liability, rather than meaningfully occupy the space, it won’t be treated as effective. Looking at the established test for what counts as genuine occupation of a property (John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344), the court said that occupation must have “some value or benefit to the possessor”. Storing boxes with no commercial purpose beyond avoiding rates doesn’t meet that bar. The court’s conclusion was blunt: occupation that has no real-world use, value, or benefit – other than gaming the rates system – isn’t genuine occupation at all.
A tightening legal and regulatory landscape
This isn’t a one-off. The courts have been moving steadily against contrived property arrangements for some time now. The UK’s highest court applied the Ramsey principle to business rates avoidance back in Hurstwood Properties (A) Ltd v Rossendale BC [2021] UKSC 16, and 48th Street Holdings pushes that direction of travel squarely into the reset-period mitigation space. For any owner still relying on a scheme that treats “occupation” as a box-ticking exercise, the message from the courts couldn’t be clearer.
The regulatory environment has been tightening too. Since April 2024, the reset period in England has been extended from 6 weeks to 13 weeks — and in Wales it’s now 26 weeks. That had already made these schemes more expensive to run, even before the Court of Appeal stepped in.
What property owners should do now
This may not be the final word. The losing party could take the case to the Supreme Court for a final ruling, and if that happens, the position might shift again. For now, though, the safe assumption is that box-storage and similar schemes are unlikely to survive a challenge. Any property owner still using one and factoring the anticipated rates savings into their accounts is taking a real risk. The sensible course is to treat this as a clear signal to change strategy, while keeping an eye on any further developments.
For landlords and property owners managing portfolios that include studios between productions, surplus office space, warehousing, or development sites waiting on planning, empty property rates are already a significant holding cost. Losing the box-storage option makes it even more important to think about what else is out there.
What alternatives remain?
There are legitimate alternatives worth exploring: genuine meanwhile uses such as pop-up events, community or charitable occupation and temporary co-working, redevelopment demolition exemptions, or creative – but commercially real – temporary lettings. The key word is “genuine”. The court has made it clear that occupation has to have real commercial substance, not just a rates-avoidance purpose.
The ESG angle
There’s a more general governance point here too, in that contrived occupation schemes have never sat comfortably alongside transparency and responsible-stewardship commitments. For organisations that take ESG reporting seriously, this decision might actually be a good thing: it removes a practice that was always hard to defend in a corporate responsibility context and nudges everyone towards genuine, productive use of vacant assets.
The tide’s turned. It’s time to plan accordingly and keep a watching brief on any further court challenges. If you have any questions about this, or if you’re unclear what you need to do, our Property team can help – click here to get in touch.