Companies to demolish office space 'to avoid tax'

Office design news from Morgan Lovell

Published on 01-09-2008

It has been reported that unused office space is being demolished in a bid for companies to avoid paying tax on the premises.

John Nicholls, chief executive of the Urban Regeneration Companies, told the office industry news source Choregus that many firms are choosing to get rid of any unused office interiors because of a tax levied against this form of property by the government last April.

Part of the problem was the implementing of the tax during more buoyant economic conditions last year when demand for office space was much higher.

Now landlords are seeing lower demand and increased costs on the premises due to the new tax and the credit crisis.

Meanwhile, David Salusbury, chairman of mydeposits.co.uk, recently commented that the lack of demand in the office rental sector means that rates are currently "not particularly high".

He concluded that should demand pick up in the future then this situation could quickly change.