BUSINESSES which rent their commercial premises should "prepare for the worst" ahead of changes to the way that lease duty is calculated.

Changes are due to come into effect on December 1 2003 despite a great deal of lobbying from businesses - notably the retail sector - and professional bodies.

Many lessees of commercial property will find themselves "much worse off" and should start planning now, warns Stephen Mills, business advisory partner at Grant Thornton's Poole office.

"The stated aim of this new policy is to ensure that those who choose to rent - rather than buy - commercial property pay duty at similar levels to the stamp duty due on a sale of a premises of comparable value," said Mr Mills.

"The measures have been introduced to eradicate stamp duty avoidance, which is admirable, but they do seem particularly punitive.

"Indeed, there seems to be an odd perception within the Inland Revenue that the use of leases is being driven by stamp duty mitigation - rather than valid commercial motives such as flexibility or not wanting to tie up capital.

"What this means is that many businesses will be hit hard and will not necessarily be able to afford the new duty.

"The clear message is that for any new leases or for those due for renewal in the next 12 months it may be worth considering bringing forward the date of the lease so that it falls within the old rules," he added.