When it comes to owning property for business purposes, there are numerous expenses and taxes to consider One of these is business rates, which are taxes that business owners must pay on non-residential properties However, a common issue that business owners face is dealing with business rates on vacant properties In this article, we will delve into what business rates on vacant property are, how they are calculated, and what strategies business owners can employ to manage and potentially reduce these costs.
Business rates are a tax that is levied by local authorities on non-residential properties in the UK These rates are used to fund local services and are calculated based on the rateable value of the property The rateable value is an estimate of the annual rental value of the property as determined by the Valuation Office Agency (VOA).
When a property becomes vacant, business owners are still required to pay business rates on that property This can be a significant financial burden, especially for businesses that are struggling or for properties that have been vacant for an extended period of time However, there are some exemptions and reliefs available to help alleviate the costs of business rates on vacant property.
One of the most common exemptions for vacant property is the 3-month exemption This exemption allows business owners to claim relief from paying business rates for the first three months that a property is empty After this period, full business rates will be due unless the property qualifies for another form of relief.
Another relief that business owners can apply for is the empty property relief This relief allows properties that have been empty for more than three months to receive a 50% discount on their business rates business rates vacant property. However, it is important to note that this relief is only temporary and will expire after a certain period of time.
In some cases, business owners may be able to apply for hardship relief if they are experiencing financial difficulties This relief is granted at the discretion of the local authority and is intended to provide temporary relief for businesses that are struggling to pay their business rates To qualify for hardship relief, business owners must demonstrate that they are facing financial hardship and are unable to pay their business rates in full.
Business owners who are unable to secure relief for their vacant property may also consider other strategies to reduce their business rates One possible option is to negotiate with the local authority to have the rateable value of the property reassessed If the rateable value is deemed to be inaccurate, business owners may be able to reduce their business rates accordingly.
Another strategy that business owners can consider is to lease out the property on a temporary basis By doing so, business owners can transfer the responsibility of paying business rates to the tenant while also generating income from the property This can be a viable option for business owners who are unable to occupy the property themselves but still want to avoid paying full business rates on a vacant property.
In conclusion, dealing with business rates on vacant property can be a complex and challenging process for business owners However, by understanding the various exemptions and reliefs available, as well as exploring other strategies to reduce business rates, business owners can effectively manage and potentially lower the costs associated with owning a vacant property By taking proactive steps and seeking professional advice when needed, business owners can navigate the complexities of business rates on vacant property and ensure that they are not paying more than necessary.