When owning or managing commercial property, one of the costs that needs to be considered is the rates payable on empty commercial property. These rates, also known as business rates, are a tax that must be paid by owners of non-domestic properties in the UK. It is important for property owners to understand how these rates are calculated and what options are available to reduce the financial burden.
The calculation of rates payable on empty commercial property is based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and represents an estimate of the annual rental value of the property as of a specific date. The rateable value is multiplied by a multiplier set by the government, known as the Uniform Business Rate (UBR), to calculate the annual rates payable. The UBR is set annually by the government and is the same across England, Wales, and Scotland.
For properties that are occupied, business rates are typically the responsibility of the occupier. However, in the case of empty commercial properties, the rates are the responsibility of the property owner. This can be a significant financial burden for property owners, especially if the property remains vacant for an extended period of time.
There are some exemptions and reliefs available to help reduce the rates payable on empty commercial property. The most common exemption is for properties that are empty and have a rateable value below a certain threshold. In England, properties with a rateable value of £2,900 or less are eligible for 100% relief, while properties with a rateable value between £2,901 and £12,000 are eligible for tapered relief. In Wales, properties with a rateable value of £2,600 or less are eligible for 100% relief, while properties with a rateable value between £2,601 and £9,000 are eligible for tapered relief.
In addition to these exemptions, there are also reliefs available for certain types of properties, such as agricultural land, charities, and community amateur sports clubs. These reliefs can provide substantial savings on business rates for eligible properties.
Property owners may also be able to negotiate a rates holiday with the local council. A rates holiday is a period of time during which the property owner is not required to pay business rates on the empty property. This can provide some financial relief while the property is vacant and efforts are being made to find a new tenant.
Another option for reducing the rates payable on empty commercial property is to appeal the rateable value assigned by the VOA. If the property owner believes that the rateable value is too high, they can submit an appeal to have it reassessed. If successful, this could result in a lower rateable value and, therefore, lower rates payable.
It is important for property owners to be aware of their options and take proactive steps to minimize the financial impact of rates payable on empty commercial property. By taking advantage of exemptions, reliefs, negotiating rates holidays, and appealing rateable values, property owners can save money and alleviate some of the financial burden associated with owning vacant commercial property.
In conclusion, rates payable on empty commercial property can be a significant cost for property owners. Understanding how these rates are calculated and exploring options for exemptions, reliefs, rates holidays, and appeals can help reduce the financial burden. By being proactive and taking advantage of available opportunities, property owners can save money and mitigate the impact of rates payable on empty commercial property.