Business rates are a key consideration for any business owner, but what happens when a property becomes vacant? This is where void business rates come into play. Sometimes referred to as empty property rates, void business rates are a tax that commercial property owners must pay when their property is not in use. In this article, we will delve into what void business rates are, how they are calculated, and some key considerations for business owners.
What are void business rates?
Void business rates are a tax that commercial property owners must pay when their property is unoccupied. Under current UK law, if a property is empty and not used for business purposes, the owner is liable to pay full business rates on the property. The rates are typically paid by the property owner, but in some cases, the occupier may be responsible for paying the rates.
It’s important to note that void business rates are separate from other business rates that are based on the rateable value of the property when it is occupied. Void rates apply when a property is unoccupied for a certain period of time, which can vary depending on local regulations.
How are void business rates Calculated?
Void business rates are typically calculated based on the rateable value of the property when it is occupied. The rateable value is determined by the local authorities and is used to calculate the annual business rates for the property. When a property becomes vacant, the owner must still pay business rates based on this rateable value.
In some cases, property owners may be eligible for a discount on their void business rates. For example, properties that have been empty for three months or less may qualify for a 100% exemption on void business rates. However, after this initial period, the property owner may be required to pay the full rate until the property is occupied again.
Key Considerations for Business Owners
For business owners, void business rates can present a significant financial burden. Paying full business rates on a vacant property can add up quickly, especially for properties that remain unoccupied for an extended period of time. As such, it’s important for business owners to be aware of the following key considerations:
1. Planning for Vacancy: Business owners should factor in void business rates when considering the financial implications of a property becoming vacant. Having a plan in place for how to cover these costs can help mitigate the impact on cash flow.
2. Seeking Exemptions: Business owners should be aware of any exemptions or discounts that may apply to their void business rates. By understanding the criteria for these exemptions, property owners can take advantage of potential cost savings.
3. Marketing and Occupancy: One of the best ways to avoid void business rates is to ensure that the property is occupied as soon as possible. Implementing effective marketing strategies and working to attract tenants can help minimize the time that a property remains vacant.
4. Consultation with Experts: Property owners who are unsure about void business rates or who need assistance in managing their property can consult with experts in the field. Working with professionals who understand the intricacies of business rates can help property owners make informed decisions.
In conclusion, void business rates are an important consideration for business owners with commercial property. Understanding how void business rates are calculated, as well as key considerations for managing these costs, can help property owners navigate the challenges of vacant properties. By planning ahead and seeking exemptions where applicable, business owners can minimize the financial impact of void business rates and ensure the long-term success of their properties.