Empty commercial properties can be a financial burden for business owners, especially when they are subject to business rates. Business rates are taxes on non-residential properties that are levied by local authorities in the UK. For property owners, empty property rates can be a significant expense, especially if the property remains vacant for an extended period of time. However, there are ways to avoid or reduce business rates on empty property, which can help alleviate some of the financial strain on business owners.
One of the most common ways to avoid business rates on empty property is by temporarily occupying the space. In the UK, business rates are usually only levied on properties that are empty for more than three months. By occupying the property for just a short period of time, business owners can reset the clock on the three-month limit and avoid having to pay empty property rates. This can be done by using the property for storage, hosting pop-up events or even conducting temporary renovations on the space.
Another way to avoid business rates on empty property is by seeking exemptions or reliefs. Certain types of properties may be eligible for exemptions from business rates, such as agricultural properties, properties that are being used for charitable purposes, or properties that are in need of major repairs. Additionally, business owners may also qualify for small business rate relief or transitional relief, which can help reduce the amount of business rates that they have to pay.
Business owners should also consider appealing the rateable value of their property in order to reduce their business rates bill. The rateable value is the estimated rental value of a property as determined by the Valuation Office Agency. By lodging an appeal and providing evidence to support a lower rateable value, business owners may be able to reduce the amount of business rates that they have to pay on their empty property.
One creative way to avoid business rates on empty property is by entering into a license agreement with a charity or community group. Charities and community groups are eligible for 80% relief on business rates, so by allowing them to occupy the property temporarily, business owners can take advantage of the relief and reduce their empty property rates bill. This can also help to create a positive relationship with the local community and generate goodwill for the business.
In some cases, business owners may also consider demolishing the empty property in order to avoid paying business rates. Once a property has been demolished, it is no longer liable for business rates, so this can be a drastic but effective way to eliminate the financial burden of empty property rates. However, it is important to consider the costs and logistical challenges associated with demolition before taking this step.
Finally, business owners should stay informed about any changes to the local council’s policies regarding empty property rates. Local authorities have the power to grant discretionary relief on business rates, so it is important to stay up to date with any new schemes or initiatives that may be available to reduce the financial impact of empty property rates. By staying informed and proactive, business owners can take advantage of any opportunities to reduce their business rates bill.
In conclusion, empty property rates can be a significant expense for business owners, but there are ways to avoid or reduce this financial burden. By temporarily occupying the space, seeking exemptions or reliefs, appealing the rateable value, entering into license agreements with charities or community groups, demolishing the property, and staying informed about local council policies, business owners can take steps to mitigate the impact of business rates on their empty property. With careful planning and strategic decision-making, business owners can effectively manage their empty property rates and alleviate some of the financial strain on their businesses.
Remember, it’s important to seek professional advice from a qualified tax advisor or property consultant before making any decisions about avoiding business rates on empty property. By working with experts in the field, business owners can ensure that they are taking the right steps to minimize their financial obligations and protect their bottom line.