EMPTY business premises in Cumbria have cost the taxpayer £20million in the last five years.

Empty 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.

But calls have been made to change the business rates system to help traders and enable councils to have a steady income stream.

Richard Watts, chairman of the Local Government Association’s resources board, said: “Councils want to see a business rates system which is responsive to local needs, fair to all and promotes growth through incentives – and local government has a strong interest in a reformed business rates system which commands confidence.

“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.

“We support the increase to 75 per cent business rates retention planned from April 2020, with a mechanism to balance between funding need and ability to grow business rates income for different councils.”

An investigation by the BBC Shared Data Unit has revealed that last year the Cumbrian district with the highest percentage of income lost to empty units was Carlisle.

The city could have made £51,670,449, but it lost £1,755,407 – or around three per cent – to the tax relief.

Earnings from business rates in Barrow-in-Furness were about half those in Carlisle, with landlords benefitting from around half a million pounds in tax relief.

Both Barrow-in-Furness and Allerdale are losing around two per cent of their business rates income to tax relief and Copeland and South Lakeland around one per cent.

Copeland is one of the areas with the lowest proportion of empty premises relief in the country on average between 2014 and 2018.

It is forecast Cumbria is set to lose £3million this financial year.

Dominic Curran, property adviser at the British Retail Consortium, 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 shopfronts and harming local communities.

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

A Treasury spokesman 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.”