EMPTY businesses in Dorset cost taxpayers an average of almost £3 million in lost income each year under a national tax relief scheme.

The law says that landlords of empty business premises cannot be taxed for at least three months.

The scheme is designed to allow for property investment and give landlords time to find a new occupant - but is also putting cash-strapped councils under additional pressure as they struggle to fund essential services such as social care.

The Dorset figures - which do not include Bournemouth, Poole and Christchurch - show that over the past five years, £14,525,741 of potential business rate income has been lost due to premises being empty.

Last year alone, property owners in Dorset were exempt from paying £3,092,723 in tax. Experts have revealed some of the ways landlords avoid paying rates for longer.

Prof Paul Greenhalgh from Northumbria University, has been advising HM Treasury on business rates and empty properties.

He said: “The common avoidance tactics are quite legitimate, to rent the property to a charity or another not for profit group that may be exempt from paying rates.

“Some other tactics are maybe more dubious,” he noted.

“Empty properties can be let to paper companies that then only hang around for a few months and the company then releases the property again and that generates another three month relief period, and you can keep rotating that round like a carousel to maintain the relief.”

After the three month window, most business premises owners must pay full business rates, although industrial premises are exempt for a further three months and listed buildings are exempt indefinitely.

Prof Greenhalgh added: “Another reason why an empty property might not pay rates is when it’s not capable of occupation, and then this comes down to acts of constructive vandalism to the property which would be an avoidance tactic.

“One example might be stripping off the profiled steel panelling off an industrial unit so the building is not capable of occupation and therefore not liable for business rates.”

Of the business rates that were collected, councils only keep around half of the money, with the rest going to the government for redistribution among the areas generating the least income.

The figures for Dorset represent combined data from the five former councils that were merged into the new unitary Dorset Council on April 1 2019.

However things are looking up because Dorset Council expects to see an improvement at the end of this year – it expects to lose £2,574,492, compared to last year’s figure of £3,092,723 for businesses in the Dorset Council area.

Out of the 16,780 taxable business premises, 1,065 are eligible for tax relief this year.

A Dorset Council spokesman said: "Dorset Council actively reviews properties within its area to maintain an accurate record of liable business rates properties.

"We make sure that properties are classified correctly and appropriate relief is granted when correct to do so. Monitoring includes detailed site inspections when required. We are working hard to support our business community and accurately identify and collect business rates income which supports the councils vital functions.”

* Data provided by BBC's Shared Data Unit via an FOI request