When it comes to owning or managing commercial property, one of the key considerations for businesses is the issue of business rates. These rates can significantly impact a company’s financial health, especially when it comes to empty commercial properties. In this article, we will delve into the topic of business rates on empty commercial property and explore how they are calculated and what businesses can do to manage this cost.
Business rates are taxes that are levied on non-residential properties in the UK. These rates are charged by local authorities based on the rateable value of a property, which is determined by the Valuation Office Agency. The rateable value is an assessment of how much a property could be rented for on the open market as of a certain date.
When a commercial property is empty, businesses are still required to pay business rates on that property, even though it may not be generating any income. This is known as empty property rates, and the rationale behind it is to discourage property owners from leaving properties vacant.
The current rules regarding empty property rates state that most commercial properties are subject to an initial three-month exemption period. This means that for the first three months that the property is empty, no business rates are due. However, after this initial period, businesses are required to pay the full business rates on the property.
For some businesses, this can be a significant financial burden, especially if the property remains empty for an extended period. In cases where a property is empty for an extended period, businesses may find themselves facing hefty bills for business rates on a property that is not generating any income.
There are, however, some exemptions and reliefs available to businesses when it comes to empty property rates. For example, properties with a rateable value of less than £2,900 are exempt from empty property rates. Additionally, certain types of properties, such as industrial properties or properties that are being actively marketed for sale or rent, may be eligible for relief from empty property rates.
One way that businesses can manage empty property rates is by exploring options for reducing their liability. For example, businesses can consider redeveloping or refurbishing their empty property in order to bring it back into use. By doing so, businesses may be able to qualify for exemptions or relief from empty property rates.
Another option for businesses is to consider entering into a formal agreement with their local authority to temporarily reduce or waive the empty property rates on their property. This can be a useful option for businesses that are facing financial difficulties or are struggling to find a tenant for their property.
It’s also worth noting that the rules around business rates on empty property can vary depending on the location of the property. Different local authorities may have different policies and procedures when it comes to empty property rates, so it’s important for businesses to familiarize themselves with the specific regulations in their area.
Ultimately, businesses that own or manage commercial property need to be aware of the potential impact that empty property rates can have on their finances. By understanding how these rates are calculated and exploring options for managing them, businesses can take steps to mitigate the financial impact of empty property rates.
In conclusion, business rates on empty commercial property can be a significant cost for businesses to bear. However, by understanding the rules and regulations around empty property rates and exploring options for managing them, businesses can take steps to minimize the financial impact of these rates. Whether it’s through redevelopment, seeking exemptions or relief, or entering into agreements with local authorities, businesses have options for managing the cost of empty property rates and ensuring that their commercial properties remain financially viable.