When it comes to running a business, there are many expenses that business owners need to consider One of the most significant costs that businesses face is business rates, also known as non-domestic rates These rates are charged on most non-domestic properties, including commercial buildings, offices, and warehouses However, what happens when a commercial property becomes empty? How are business rates affected, and what can business owners do to alleviate the financial burden of these rates on empty commercial properties?
Business rates on empty commercial properties can be a significant financial burden for business owners In the UK, business rates are charged at a rate based on the rateable value of the property The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate how much a business owner needs to pay in business rates each year When a commercial property becomes empty, business owners are still required to pay business rates on the property.
The rationale behind charging business rates on empty commercial properties is to prevent property owners from leaving properties vacant for extended periods By charging business rates on empty properties, the government aims to encourage property owners to bring their properties back into use or to sell them to someone who will use them However, this policy can often be seen as punitive for business owners who are struggling to find tenants for their properties or who are going through financial difficulties.
One important thing to note is that business rates exemptions for empty commercial properties have changed over the years Prior to April 2008, commercial properties that had been empty for more than three months were exempt from paying business rates for the first three months that the property was empty However, as of April 2008, this exemption was reduced to just one month business rates empty commercial property. This change has put additional financial pressure on business owners who own empty commercial properties.
One way that business owners can reduce the financial burden of business rates on empty commercial properties is to apply for empty property relief Empty property relief allows business owners to receive a discount on their business rates if their property has been empty for a certain period In England, for example, business owners can receive a 100% discount on their business rates for the first three months that their property is empty After the initial three months, the discount drops to 10% for most properties, although there are some exceptions.
Another option for business owners with empty commercial properties is to consider letting out the property on a short-term basis By temporarily renting out the property, business owners can generate income from the property and potentially reduce the amount that they have to pay in business rates This can be a particularly attractive option for businesses that are struggling to find a long-term tenant for their property.
Business owners can also explore the option of appealing the rateable value of their property if they believe that it has been overvalued by the VOA By appealing the rateable value, business owners may be able to reduce the amount that they have to pay in business rates each year However, it’s important to note that the appeals process can be complex and time-consuming, so business owners may want to seek professional advice before proceeding.
In conclusion, business rates on empty commercial properties can be a significant financial burden for business owners Understanding the impact of business rates on empty commercial properties and exploring options such as empty property relief, temporary rentals, and rateable value appeals can help business owners alleviate some of the financial pressure associated with owning empty commercial properties By being proactive and exploring all available options, business owners can better manage their financial obligations and work towards finding a solution that works for their individual circumstances.