Business rates vacant property, also known as empty property rates, can be a significant concern for business owners who find themselves with unused commercial space. Whether you are a landlord with vacant properties or a business owner with unused space, understanding the implications of business rates on empty properties is crucial. In this article, we will explore what business rates vacant property are, how they are calculated, and what steps you can take to minimize the impact on your bottom line.
What are business rates vacant property?
Business rates are taxes levied on most non-domestic properties in the UK. These taxes help fund local services such as police, fire departments, and street maintenance. Business rates are typically based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA). When a property is vacant, it is still subject to business rates, albeit at a discounted rate known as the empty property rate.
The empty property rate is currently set at 100% for properties that have been empty for three months or more. This means that if your commercial property remains vacant for an extended period, you will be required to pay the full business rate. However, there are some exceptions to this rule, such as newly built properties which are exempt from empty property rates for the first three months.
How are business rates vacant property Calculated?
The calculation of business rates for vacant properties is based on the rateable value of the property. The rateable value is determined by the VOA and takes into account factors such as the size, location, and use of the property. Once the rateable value is established, it is multiplied by the business rates multiplier set by the government to determine the annual business rates bill.
When a property becomes vacant, it is still valued for business rates purposes. However, the property is subject to the empty property rate, which is typically set at 100% of the normal business rate. This means that even if your property is empty, you will still be required to pay business rates, albeit at a discounted rate.
Minimizing the Impact of business rates vacant property
There are several strategies that business owners and landlords can employ to minimize the impact of business rates on vacant properties. One common approach is to temporarily occupy the property with short-term tenants or pop-up shops. By doing so, you can avoid paying the empty property rate and generate some income while searching for a long-term tenant.
Another option is to consider appealing the rateable value of your property with the VOA. If you believe that the rateable value is inaccurate or unfairly high, you can submit a formal appeal to have it reassessed. A lower rateable value would result in reduced business rates, ultimately saving you money in the long run.
Additionally, business owners can explore the option of applying for temporary business rates relief. Some local councils offer relief schemes for businesses occupying vacant properties, providing a temporary reprieve from business rates payments. By taking advantage of these relief programs, you can alleviate some of the financial burden associated with empty properties.
In conclusion, business rates vacant property can pose a challenge for landlords and business owners alike. Understanding how business rates are calculated for vacant properties and exploring strategies to mitigate the impact can help you navigate this complex regulatory landscape more effectively. By staying informed and proactive, you can minimize the financial implications of vacant properties and ensure the sustainability of your business in the long term.