Court of Appeal ends £1bn ‘box-shifting’ tax avoidance scheme in London

Three judges of the Court of Appeal ruled that the “box-shifting” tactic—placing and removing empty black boxes in vacant commercial premises to trigger a three-month rate holiday—does not meet the legal definition of “beneficial occupation”. The decision overturns a prior high-court ruling and ends a loophole that let owners such as 48th Street Holdings Ltd, lessee of the 2 America Square building, claim up to a two-thirds reduction in business rates.

The City of London Corporation, which sued the company and its rate-mitigation partner Principled Offsite Logistics Ltd, hailed the verdict as a win for councils that have lost an estimated £35 million a year since the pandemic. Government spokespeople acknowledged concerns about misuse of Empty Property Relief and signalled further action may follow. The ruling follows earlier high-court cases, including a 2018 win for POLL, and arrives as new rules now require 13 weeks of occupation for relief. Critics warn that alternative variants—such as charitable exhibitions or agricultural uses—could still be exploited.