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Brown to free firms in lease trap
GORDON BROWN is considering offering tax relief worth tens of millions of pounds to help small and medium businesses move to better premises. The Chancellor is looking at the possibility of allowing firms to write off against tax the penalty payments charged by landlords under 'onerous leases' when a tenant wishes to leave.
While this concession would be expensive for the Exchequer, it could unblock a logjam of businesses trapped in premises that are unsuitable and limit their growth.
Onerous leases contain burdensome features such as not allowing the tenant to sublet or to end the tenancy early without incurring large penalty payments. Usually, the payment-cannot be offset against the business's overall tax bill.
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