What the High Court's 2025 Empty Rates Cases Taught Landlords (and What Came Next)

In 2025 the High Court handed down several judgments on empty property business rates. Some artificial avoidance schemes were struck down with force. Other decisions, read in isolation at the time, appeared to validate intermittent occupation tactics. That second reading did not last. This article records what the courts said then, what owners should still take from it, and why later Court of Appeal authority changed the picture again.

The most consequential administrative ruling for landlords was [2025] EWHC 2336 (Ch), in which Wigan and Trafford councils challenged SPV lease-and-liquidate arrangements. That judgment remains a useful statement of how courts treat paper transactions with no real use. The same year also produced City of London v 48th Street Holdings Ltd & Principled Offsite Logistics Ltd [2025] EWHC 1130 (KB), which upheld intermittent box storage on facts that the Court of Appeal later rejected. Treat both as legal history, not a shopping list of safe tactics.

The SPV case: why paper leases failed

In [2025] EWHC 2336 (Ch), two local councils challenged arrangements in which an owner granted a short lease to a freshly incorporated special purpose vehicle, which was then placed into voluntary liquidation. The theory was that a company in winding-up could hold property without triggering empty rates on the landlord. The High Court rejected the scheme. The judge treated the SPV leases as shams: the shell company never genuinely occupied or traded, control remained with the owner, and the arrangement existed only to avoid liability. The landlord was held liable for the full rates bill.

That outcome sits comfortably with Hurstwood Properties v Rossendale BC [2021] UKSC 16, in which the Supreme Court applied the Ramsay principle to similar managed-insolvency tactics. The lesson for owners is straightforward: interposing a paper company without real occupation does not move the rates liability. That part of the 2025 landscape has not softened since.

Schemes courts have treated as artificial or ineffective

Beyond SPVs, several popular empty-rates tactics have attracted sustained judicial scepticism where the use is token or the occupier is a facade.

Property guardians. Live-in guardian models are often marketed as a way to keep a building occupied and reduce empty rates. In Southwark LBC v Ludgate House Ltd [2020] EWCA Civ 1637, the Court of Appeal held that guardians performing a security function for the owner, without exclusive possession of discrete units, did not transfer rateable occupation. The owner remained liable, including on a bill running to around £3 million. Guardians may still serve a security purpose; they are a poor rates strategy when the legal structure keeps the owner in control.

Charity leasing. Mandatory charitable relief can be legitimate where a charity genuinely uses premises for its objects. Problems arise when the charity's presence is nominal and the primary purpose is to shelter the owner from rates. In Public Safety Charitable Trust v Milton Keynes [2013], minimal transmitter installations did not amount to occupation for charitable purposes. Tribunals and councils increasingly ask how much of a building is actually used, not merely who is named on the lease.

Token agriculture and similar artifice. Snail-farm and comparable schemes have been treated as shams where the "farming" activity is negligible. Isle Investments Ltd v Leeds City Council [2021] EWHC 345 (Admin) is a leading example of a court looking through contrived arrangements to the landlord who remained in occupation.

The 48th Street High Court decision: what it said, and why it mattered at the time

In May 2025 the High Court in City of London v 48th Street upheld a cycle in which Principled Offsite Logistics Ltd took short leases, stored boxes on site, and vacated so the owner could claim a fresh empty-rates exemption. The judge accepted that the boxes were physically present, that Principled had exclusive use for the period, and that the motive of securing relief did not by itself defeat occupation. That reasoning drew heavily on Principled Offsite Logistics v Trafford Council, which had supported a similar market for several years.

At publication, many commentators (including us) treated that judgment as the then-current statement of the law on intermittent occupation. It no longer is. In July 2026 the Court of Appeal overruled POLL v Trafford, allowed the City's appeal, and held that "pure rate mitigation occupation" with no independent commercial utility is not occupation at all. Owners who relied on the High Court version without reading the appeal should treat box-shifting as high risk, whatever paperwork accompanies it. See our full treatment in The Day the Boxes Lost.

Two cautions worth retaining from the High Court year, even after the appeal:

• Courts will look at substance over form when an arrangement exists only to avoid tax.
• Parliament had already lengthened the reset period from six weeks to thirteen weeks from April 2024, signalling discomfort with short-cycle occupation tactics.

What the High Court did not settle, and what the Court of Appeal later answered, is whether occupation undertaken solely to reset Empty Property Relief can ever be "beneficial" to the occupier when the only benefit is the rates saving itself.

What the 2025 cases meant for stakeholders (then)

Property owners

The SPV judgment gave owners a clear warning: liquidation structures without real use are vulnerable to challenge, with backdated liability and costs. Guardian and nominal charity models were already fragile after Ludgate House and charity enforcement. The 48th Street High Court decision temporarily encouraged specialist box providers; that encouragement did not survive the Court of Appeal. Prudent owners should assume billing authorities will test any claimed occupation closely and should not treat a single first-instance win as settled safe law.

Local authorities

Councils gained ammunition against SPV and sham charity arrangements. The 2025 High Court box decision was a setback for several billing authorities at the time, but the 2026 appeal restored their ability to challenge pure mitigation cycles. Authorities continue to inspect claimed occupations and demand evidence of real use.

Advisers and agents

Professionals who marketed aggressive avoidance products faced reputational and litigation risk even before the appeal. The CoA judgment reinforces that advisers should distinguish between documented commercial use of a void and products sold primarily as rates resets. That distinction is now explicit in the case law.

Old tactics versus what courts scrutinise today

The table below summarises how several familiar models have fared. It reflects authority available through 2026, including the Court of Appeal's narrowing of box shifting.

1. SPV lease-and-liquidate

Status: struck down. Hurstwood and [2025] EWHC 2336 (Ch) leave little room for argument. Owners remain liable where no genuine occupier exists.

2. Property guardians

Status: poor rates tool when the owner retains control. Ludgate House remains the leading authority. Guardians may still help with security; they do not reliably shift business rates.

3. Storage-based and box-shifting cycles

Status: high risk after [2026] EWCA Civ 970. Pure cycles whose only commercial purpose is resetting relief were held not to be occupation. Older cases such as Makro v Nuneaton [2012] EWHC 2250 (Admin) and PHE v Harlow [2021] EWHC 909 (Admin) involved occupation with independent utility (records the occupier was required to keep, files a public body genuinely needed). The Court of Appeal distinguished those from pure mitigation and left open whether Ramsay-style analysis might bite in future. Do not assume Makro validates a box cycle sold only for relief.

4. Charity leasing

Status: viable only with genuine charitable use across a meaningful proportion of the premises. Token occupation and "next in use" gaming attract Commission and council scrutiny.

5. Live commercial services in voids

Status: distinct from rates products. Where a service provider installs and operates equipment for its own business (connectivity, advertising, monitoring), courts have historically asked whether the use has utility independent of rating law. Sunderland v Stirling Investment Properties [2013], in which active broadcasting equipment in a warehouse constituted occupation, was cited without criticism in the 2026 appeal. That is a different question from placing redundant boxes solely to reset relief. Any occupation must still satisfy the four classic limbs, and outcomes depend on facts and evidence.

Beneficial occupation: what the courts have been testing

Rateable occupation traditionally requires four elements from John Laing & Son Ltd v Kingswood Area Assessment Committee [1949] 1 KB 344: actual, exclusive, beneficial to the occupier, and not too transient.

Actual: something must genuinely happen on the premises. Symbolic presence is not enough.

Exclusive: the occupier must control the space. Guardian and sham-lease models often fail here because the owner retains general control.

Beneficial: this limb has moved most. The 2026 Court of Appeal held that benefit must have utility independent of the rating legislation where the scheme is pure rate mitigation. Occupation that only makes sense because of Empty Property Relief rules may not qualify. Where a business runs a real service from the premises, motive to assist a landlord does not automatically defeat occupation, but the service must stand on its own feet.

Not too transient: from April 2024 a new exemption generally requires at least thirteen weeks of occupation before a further empty period can begin. Plan around that statutory floor, not the old six-week folklore.

What owners can do instead of chasing schemes

Empty rates pressure is real. Altus Group and others have long quoted aggregate landlord liability on void stock in the hundreds of millions annually. Relief rules, however, are not a product category. They are a consequence of how a property is occupied, if at all.

VacatAd's work sits in that gap differently. We provide Connect (guest WiFi and portal access), Advertise (window and digital display inventory for local businesses), and Protect (remote monitoring of void units). Those are commercial services delivered while a building is between tenants. If lawful occupation follows from that activity, empty rates may fall as a secondary outcome. We do not sell a "mitigation scheme", we do not guarantee relief, and we do not promise a particular saving.

That framing matters after 48th Street. A provider should be able to answer: would this activity make commercial sense if rating legislation did not exist? Guest connectivity and local advertising do. Cycling worthless boxes solely to reset relief does not, the Court of Appeal has now said.

Operationally, VacatAd installs enterprise-grade equipment under a short licence, keeps services live for the agreed term, documents uptime and usage, and notifies the billing authority. Owners retain flexibility to reletting: equipment can be removed when a tenant is found. Monitoring gives visibility over a void without placing residents in a commercial shell.

Conclusion: treat 2025 as a chapter, not the final word

The High Court's 2025 decisions remain instructive on SPVs, guardians, and sham charities. They also show how quickly first-instance wins can be overtaken. Owners who built strategies on POLL v Trafford or the May 2025 48th Street judgment need to reassess against [2026] EWCA Civ 970.

Practical steps:

• Audit any third-party "occupation" product against the independent utility test.
• Keep evidence of real service delivery, not just a lease and a photo of boxes.
• Separate void management (security, connectivity, local visibility) from promises of guaranteed relief.

If you want to explore live services in a void rather than another rates workaround, VacatAd can walk through Connect, Advertise and Protect for your portfolio. Empty rates may reduce where occupation genuinely follows; that is a matter for your advisers and the billing authority, not a sales guarantee.