Empty commercial property can be a burden for many business owners, not only due to the loss of potential rental income but also because of the business rates that must be paid even when the property is vacant. In the United Kingdom, business rates on empty commercial property have been a hot topic of debate, with many owners feeling the financial strain of these taxes. In this article, we will explore the implications of business rates on empty commercial property and provide some tips on navigating this sometimes complex issue.
Business rates are a tax that all business owners in the UK must pay on their commercial properties. The rates are determined by the local council and are based on the rateable value of the property. This value is set by the Valuation Office Agency (VOA) and is reassessed every five years. The business rates are designed to help fund local services such as roads, schools, and emergency services.
One of the most contentious issues surrounding business rates is the fact that owners of empty commercial properties are still required to pay these taxes. This can be a significant financial burden for owners who are struggling to find tenants or who are in the process of renovating their properties. In some cases, owners may be paying thousands of pounds in business rates each year on properties that are not generating any income.
There are some exemptions and reliefs available for owners of empty commercial properties. For example, properties that are classified as small business premises with a rateable value of under £2,900 are exempt from paying business rates. Additionally, properties that are undergoing major structural repairs or renovations may be eligible for a 100% relief on their business rates for a period of up to three months.
Despite these exemptions and reliefs, many owners of empty commercial properties still find themselves struggling to keep up with the financial burden of business rates. In some cases, owners may be forced to sell their properties at a loss or even declare bankruptcy due to the high costs associated with these taxes.
So, what can owners of empty commercial properties do to navigate the issue of business rates? One option is to apply for relief or exemptions that they may be eligible for. Owners should carefully review the criteria for these reliefs and exemptions and ensure that they are taking advantage of all available options.
Another option is to consider leasing the property on a short-term basis to generate some income and mitigate the cost of business rates. This can be a good way to cover some of the expenses associated with owning an empty commercial property while waiting for a long-term tenant.
Owners may also want to consider speaking with their local council about negotiating a payment plan for their business rates. Councils are often willing to work with property owners to come up with a plan that allows them to pay their rates in installments rather than all at once.
Finally, owners of empty commercial properties may want to consider seeking professional advice from a property tax specialist. These professionals can offer guidance on navigating the complex regulations surrounding business rates and may be able to help owners find additional ways to reduce their tax burden.
In conclusion, business rates on empty commercial property can be a significant financial burden for many owners. However, by exploring available exemptions and reliefs, considering short-term leasing options, negotiating payment plans with the local council, and seeking professional advice, owners can take steps to navigate this issue and mitigate the costs associated with owning an empty commercial property.