GOVERNMENT defiance over a new tax on empty property, which came into force on Tuesday, April 1, is being condemned by the country's major retailers, office and warehouse owners. They believe it will harm communities and damage business.

In an unprecedented demonstration of anger, the British Plastics Federation (BPF) and the British Retail Consortium (BRC) and commercial occupiers' body CoreNet Global are telling ministers that the government is ignoring the reality of the current economy and property market in their desperation to plug holes in the nation's finances.

The rule change has seen full rates charged on empty properties, with the government raking in an extra three billion pounds from businesses over the next three years.

The trade bodies, representing occupiers and owners, large and small, have written to local government minister John Healey saying he is ignoring the basic business principle that property owners need to lease out their properties in order to make their businesses work.

Properties are empty because they are not wanted at that time or place and new tax burdens will not change this.

Similarly, cutting relief will reduce the flexibility of leases and cut choice for small businesses wanting to move to office or retail space that fits their changing needs.

Regeneration projects will be rendered unviable because of the added costs, undermining government aims and damaging communities.

Before the change, no business rates were due for the first three months that shops and offices were empty. After that, 50 per cent of the normal rate had to be paid.

Under the new rules there will still be no charge for the first three months they are empty. After that time full rates must be paid, even if a tenant has not been found.

After six months factories and warehouses will lose what was 100 per cent relief. Properties that have already been vacant for the three or six months at April 1 will immediately attract the full rate, as the tax is retrospective.

In their joint letter, the trade bodies tell the government that if it cannot prove its claims that the extra tax will increase property availability and reduce rents, it must reintroduce the 50 per cent relief or extend the period when no rates are due to better reflect the time taken to fill vacant property.

BRC director general Stephen Robertson said: "The government must take us for April Fools.

"It is ignoring the mechanics of the property market because of a desperate need to plug holes in the budget at a time when the economic slowdown makes it more likely business premises will fall vacant.

"In the current economic climate government should be alleviating the tax burden on businesses, not making them less competitive."