LANDLORDS in Plymouth stand to be hit in the pocket next year after the Government scrapped business rates relief for small properties.

Parliamentary under-secretary of state Bob Neill this week announced the coalition Government is to scrap the 100 per cent rate relief for empty properties with a rateable value of up to £18,000.

The move, which comes into force on April 1, is expected to rake in an extra £400million per annum from businesses next year.

Ashleigh Phillips, of Plymouth property consultants Vickery Holman said: "It's a tax grab at a soft target, in my opinion."

Mr Phillips, an associate director at the firm, said the Government's decision would affect empty properties such as small industrial units, shops and pubs.

"It's unwelcome for those that hold such property," he said. "But it's the Government closing a previously available loophole."

He said it would increase costs for some businesses, particularly as the economy is still slowly climbing towards recovery.

"The timing is unfortunate," he said. "On top of the VAT rise and everything else it's unfortunate, but not surprising."

At present, businesses with empty property that has a rateable value of less than £18,000 are spared empty rates.

The relief has been given on a year-by-year basis but Mr Phillips said: "The property professions hoped it would be kept in place.

"It will affect small landlords that have vacant secondary units and the city council if they have vacant stock."

He said scrapping the relief would have implications for businesses which may try to sell or rent out empty properties, potentially flooding the market.

Some property owners may even be tempted to demolish or "vandalise" small properties, Mr Phillips said, in a bid to make them unusable and therefore tax free.

"If you make it incapable of use or occupation you do not pay rates on it," Mr Phillips said.

The property industry has reacted angrily to the announcement and said it would jeopardise a private sector-led recovery of the economy.

The Government levies full business rates on unoccupied offices, shops and warehouses and this has been unpopular with the property industry since its introduction two years ago.

The British Property Federation said the Government's announcement came despite criticism of the tax from the Secretary of State Eric Pickles and the Business Secretary Vince Cable while they were in opposition.