Commercial tax leaves cities 'looking like broken teeth'

Tax on empty commercial buildings is threatening to derail the UK's regeneration projects.

That is the view of one of the government's most senior advisors, who says that commercial property owners are demolishing empty buildings to avoid paying the newly introduced tax.

According to a report in The Guardian, some developers are leaving building sites unfinished rather than risk incurring any liability for tax.

John Nicholls, chair of a group which represents urban regeneration companies, told The Guardian: "There is a lot of pre-emptive demolition going on. This is already having a visual impact - cities are beginning to look like broken teeth."

Prior to the tax being introduced, vacant commercial buildings received a rate cut of 50% and industrial units did not pay at all.

Since Chancellor Alistair Darling reintroduced the tax, commercial buildings get rate relief for three months before paying 100% of the tax, whereas industrial units get six months of relief.