Empty properties can be a headache for any business owner. Whether it’s a storefront that has yet to find a tenant or an office space that is no longer in use, these vacant properties can quickly become a financial burden. In addition to the regular costs associated with owning property, business owners must also consider the additional expense of business rates on empty property. Understanding how these rates work and what options are available can help business owners navigate this potentially costly situation.
Business rates are a tax that business owners must pay on non-residential properties in the UK. These rates are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA) and reviewed every five years. The rateable value is an estimate of the open market rental value of the property as of a specific date.
When a property becomes vacant, business rates on empty property come into play. In most cases, business owners must continue to pay business rates on empty property for up to three months after the property becomes vacant. After this initial three-month period, the rates can be reduced to 0% for certain types of properties, such as industrial buildings, listed buildings, and properties with a rateable value of less than £2,900. However, for most commercial properties, business rates on empty property are payable at the full rate unless the property qualifies for an exemption.
There are several exemptions and reliefs available to business owners who are struggling to pay business rates on empty property. One common exemption is the six-month empty property rate relief, which allows business owners to receive a discount of 100% on their business rates for the first six months that the property is empty. After this initial period, the property will be subject to the standard business rates unless another exemption applies.
Another option for business owners facing high business rates on empty property is to apply for hardship relief. This relief is available to business owners who are experiencing financial hardship and are struggling to pay their business rates. The local council has the discretion to grant hardship relief on a case-by-case basis, so business owners must make a compelling case for why they should receive this relief.
In some cases, business owners may be able to take advantage of the government’s policy on small business rate relief. This relief is available to businesses with a rateable value of less than £15,000 and can significantly reduce the amount of business rates that must be paid. Business owners should check with their local council to see if they qualify for this relief and how to apply for it.
For business owners who are unable to find tenants for their vacant properties, there is the option of applying for the unoccupied property rate relief. This relief reduces the amount of business rates that must be paid on properties that are undergoing major repairs or structural changes. The relief is available for up to 12 months for most properties and can provide much-needed financial relief to business owners who are struggling with the costs of maintaining their empty properties.
Business owners who are unsure about their obligations when it comes to business rates on empty property should seek advice from a professional. A chartered surveyor or a commercial property expert can help business owners navigate the complex world of business rates and ensure that they are not paying more than they need to. These professionals can also provide guidance on how to apply for exemptions and reliefs that can reduce the financial burden of owning empty property.
In conclusion, business rates on empty property can be a significant expense for business owners. However, there are options available to help mitigate these costs, including exemptions, reliefs, and rate reductions. By understanding how business rates work and seeking professional advice when needed, business owners can successfully navigate the complexities of owning empty property and avoid unnecessary financial burdens.
Overall, it is important for business owners to be proactive in managing their business rates on empty property and to explore all available options for reducing these costs.
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