When it comes to owning a property for business purposes, there are often various costs and taxes that need to be considered One of the key areas that business owners need to be aware of is the issue of business rates on empty properties This particular aspect of property ownership can sometimes catch businesses off guard, leading to unexpected financial burdens In this article, we will delve into the topic of business rates on empty properties, exploring what they are, how they are calculated, and what businesses can do to manage this aspect of their financial obligations.
Business rates are taxes that are imposed on non-domestic properties, including commercial properties, shops, offices, and warehouses These rates are charged by local authorities and are used to fund local services such as road maintenance, schools, and fire services When a property is empty, it may still be subject to business rates, depending on certain criteria set out by the government.
It is essential for business owners to understand that business rates on empty properties are not a fixed rate but are determined based on the rateable value of the property The rateable value is an estimate of the property’s open market rental value as of a specific date, set by the Valuation Office Agency This value is then used to calculate the business rates that are payable on the property.
The rules regarding business rates on empty properties can vary depending on the location of the property and the specific circumstances In England, for example, the rateable value determines how long a property can remain empty before business rates are due Properties with a rateable value of less than £2,900 are exempt from paying business rates while they are empty Properties with a rateable value between £2,900 and £12,000 are entitled to a three-month exemption period, after which they are subject to paying the full business rates business rates on empty property. Properties with a rateable value of £12,000 or more are required to pay the full business rates on the property after being empty for three months.
In some cases, businesses may be eligible for additional exemptions or discounts on their business rates for empty properties For example, charities and community amateur sports clubs are entitled to an 80% discount on the business rates for empty properties that are held for the purpose of charitable activities Industrial properties are also subject to different rules, with a six-month exemption period before full business rates are due.
Managing business rates on empty properties can be a challenging task for businesses, especially those with multiple properties or properties in different locations It is crucial for business owners to keep track of the rateable value of their properties and understand the rules and exemptions that may apply in their specific circumstances Failure to pay business rates on empty properties can result in penalties and legal action by the local authorities, leading to additional financial strains for businesses.
One strategy that businesses can consider to manage business rates on empty properties is to actively market the property for rent or sale By demonstrating that efforts are being made to secure a tenant or buyer for the property, businesses may be able to secure additional exemptions or discounts on their business rates It is also important for businesses to keep accurate records of the efforts made to market the property, including any correspondence or advertising materials used in the process.
Another option for businesses to consider is to explore the possibility of appealing the rateable value of the property with the Valuation Office Agency If a business believes that the rateable value of their property is inaccurate or unfair, they have the right to challenge this valuation and seek a reassessment By presenting evidence such as rental information, property comparisons, or market trends, businesses may be able to negotiate a lower rateable value for their property, thus reducing the amount of business rates payable.