Empty commercial property can be a headache for owners, not just because it isn’t generating income, but also because they are still required to pay the business rates on the vacant space. rates on empty commercial property can be a significant financial burden for any business owner, but understanding how they are calculated and what options are available can help maximize ROI and reduce costs.
Business rates are taxes that are payable on most non-domestic properties, including commercial premises such as offices, shops, warehouses, and factories. The amount of business rates payable is calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA).
For empty commercial properties, the rules around business rates are slightly different. Previously, business owners were granted a 100% relief on business rates for the first three months that a property was empty, followed by a 50% discount for the next three months. However, as of April 2020, changes were implemented that removed these exemptions, meaning that business rates are now payable on empty commercial properties.
This change has had a significant impact on business owners, particularly those who are struggling to fill their vacant properties. Paying business rates on empty premises can be a drain on resources, especially for small businesses or those operating within a competitive market.
So, what options are available to businesses who are facing high rates on their empty commercial property? One possible solution is to appeal the rateable value of the property to the VOA. If a business owner believes that the rateable value of their property is too high, they can submit an appeal to have it reassessed. This could result in a lower rateable value and therefore reduced business rates.
Another option is to apply for an exemption from business rates if certain conditions are met. For example, if a property is undergoing renovation or repair works, the business owner may be eligible for a temporary exemption from business rates. This can provide some relief while the property is being brought back into use.
Business owners can also explore the possibility of leasing out the empty property to a third party. By doing so, they can avoid paying the full business rates themselves, as the responsibility would fall on the tenant instead. This can be a mutually beneficial arrangement for both parties, as the business owner avoids high rates on an empty property and the tenant gains access to a commercial space.
In some cases, business owners may consider demolishing or repurposing the empty property as a way to reduce business rates. If a property is no longer suitable for its original use, repurposing it into a different type of commercial space can result in a lower rateable value and therefore lower business rates.
It’s also important for business owners to stay informed about any changes to the regulations surrounding business rates on empty properties. The government may introduce new policies or relief schemes that could benefit businesses struggling with high rates.
Ultimately, understanding rates on empty commercial property is essential for maximizing ROI and reducing costs. By exploring options such as appealing the rateable value, applying for exemptions, leasing out the property, or considering demolition or repurposing, business owners can find ways to alleviate the financial burden of business rates on vacant properties.
In conclusion, rates on empty commercial property can be a significant financial challenge for business owners. However, by understanding how they are calculated and exploring various options to reduce costs, business owners can minimize the impact on their bottom line and maximize ROI. It’s crucial for business owners to stay informed about the regulations surrounding business rates and to take proactive steps to address high rates on empty properties.