EMPTY businesses cost North-East taxpayers more than £137m in the past five years, an investigation found.

Government figures have revealed that across the region £137,626,324 of business rates – a tax on non-domestic properties, like shops, warehouses and pubs based on a property’s rateable value – been lost as a result of unused premises.

Under the law vacant shops, offices and warehouses do not have to pay business rates for three months. The aim of the tax relief is to allow for property investment and give landlords time to find a new occupant. However, data from the past five years show the cost of this is being felt across the region.

The national body which represents local councils has urged central Government to progressd with business rate reform.

Councillor Richard Watts, chairman of the Local Government Association’s Resources Board, said: “Business rates are an extremely important source of income for local government and with an overall funding gap of £8 billion by 2025, the Government must commit to moving forward with vital reforms, which include addressing business rates avoidance and the impact of reliefs, such as empty premises relief.”

However a spokesperson from HM Treasury said that a balance needs to be struck so that landlords aren’t penalised.

They said: “Empty property relief strikes a balance between incentivising property owners to put vacant properties to use, while not penalising those who lose a tenant at short notice.

“Whilst the rate of business rates collection varies between individual authorities, the local government finance system has been designed so that business rates income is redistributed across the country according to the needs of local areas.We will announce further details of the business rates review in due course.”

Dominic Curran, property advisor at the British Retail Consortium, described the tax system as “broken” and in need of reform.

He said: “It has been a challenging year for many retailers, as many shops struggle to adapt to rising cost pressures and changing consumer habits.

“High among the concerns for retail firms is business rates – a tax which disproportionately harms retailers, driving shop closures and job losses, leaving empty shop fronts and harming local communities.

“It is essential that the Government makes good on its pledge to reform this broken tax system.”

In County Durham empty businesses are costing taxpayers an average of £4,912,954.80 in lost rates each year. Over the past five years £24,564,774 has been lost as a result of vacant units.

In the last financial year landlords were exempt from paying £5,471,224 of rates. In 2018/19 £110,166,050 was collected and the amount lost in relief came to 3.67 per cent of the total payable.

The council is forecast to have collected £111,000,000 in business rates, losing £3,115,096.

Of 15,490 taxable units, the authority has told the Government 1,133 need empty premises relief.