Correspondence

7/2026: Court of Appeal decision on 'box-shifting'

Published 3 September 2026

Applies to England

To: Chief Finance Officers of English Billing Authorities - For the attention of the Business Rates section

From: Non-Domestic Rates Team, LGF - Local Taxation, Ministry of Housing, Communities and Local Government (ndr@communities.gov.uk)

Date: 3 September 2026

Dear Chief Finance Officer 

This is the seventh business rates information letter to be issued by the Ministry of Housing, Communities and Local Government in 2026. See previous business rates information letters or archived letters. 

This letter covers:   

• Court of Appeal decision in The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Limited & Anor [2026] EWCA Civ 970
• 2025/2026 New Burdens Assessment

Court of Appeal decision

The Court of Appeal have handed down their decision in The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Limited & Anor [2026] EWCA Civ 970. The case concerned a scheme operated by Principled Offsite Logistics Limited known as “box shifting” under which boxes and their contents were placed into an otherwise vacant office to register the then 6 weeks of occupation necessary to trigger a further 3 months of relief from empty property rates. The Court of Appeal considered whether the boxes amounted to occupation for rating.

The Court had regard to the Supreme Court’s earlier decision in Rossendale which considered the role of the “Ramsay principle” in business rates. The Court of Appeal said (at paragraph 53):

The Ramsay principle has in appropriate cases allowed transactions to be disregarded where they have a sole aim of avoiding tax. The rationale for this is that “it is not generally to be expected that Parliament intends to exempt from tax a transaction which has no purpose other than tax avoidance” (Rossendale at [11]). Rossendale has made clear that this rationale applies equally to rating: see in particular at [49]. The Ramsay principle is also not limited to transactions but may cover matters such as status (Rossendale at [14]).

The Court of Appeal found that the placement of boxes of files in an office is not occupation in rating terms (paragraph 83) :

where the sole aim of doing so is to generate occupation for the purposes of those provisions, there is no commercial or business purpose save for rate mitigation, and the putative occupation is “beneficial” only due to the claimed rate mitigation benefits.

As a result the attempt to secure repeated periods of empty rate relief through box shifting in this case failed. The court also noted that the application of the Ramsay principle in business rates may extend beyond “pure rates mitigation occupation schemes” (paragraph 82).

Local authorities should ensure they are familiar with this new development in case law.  In view of this judgement local authorities should now review whether box shifting schemes, and other schemes where the object of the occupation is rates avoidance, should continue to be recognised as occupation for rating and withdraw relief where they conclude it is not.

MHCLG is working with local government partners to explore how it can help local authorities tackle rates avoidance through litigation such as this and other measures.

2025-26 New Burdens Assessment

The data collection to support the New Burdens Assessment as trailed in the Business Rates Information Letter issued on 26 November 2025 was issued via the DELTA platform on 21 August 2026. The data collection will be live until 18 September 2026.

Any enquiries relating to this data collection should be directed to ndr@communities.gov.uk.