When it comes to running a business, there are many expenses to consider – from rent and utilities to payroll and inventory One often overlooked cost is business rates, which are taxes imposed on commercial properties These rates are charged based on the rateable value of the property, and they help fund local services such as roads, schools, and waste removal However, what happens when a property sits unoccupied? In this article, we will explore what business rates on unoccupied property are, how they are calculated, and what options are available to business owners facing this financial burden.
Business rates on unoccupied property can be a significant expense for business owners, especially those who are unable to secure tenants or buyers for their property In the United Kingdom, unoccupied commercial properties are subject to business rates just like occupied properties This means that even if a property is empty, the owner is still responsible for paying business rates to the local council.
The rateable value of a property is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors Association (SAA) in Scotland, and the Valuation Office in Wales This value is based on the estimated rental value of the property on a certain date, taking into account factors such as location, size, and condition of the property Business rates are then calculated based on this rateable value, and they are usually charged annually.
For unoccupied properties, the rules regarding business rates can vary depending on the circumstances In most cases, business owners are entitled to a three-month exemption period during which no business rates are due This is intended to give owners time to find a new tenant or buyer for the property After the three-month period, however, business rates are usually charged at the full rate unless the property meets certain criteria for exemptions or reliefs.
There are several exemptions and reliefs available to business owners with unoccupied properties One common exemption is the empty property rates relief, which provides a 100% discount on business rates for the first three months that a property is unoccupied business rates unoccupied property. This can be extended to six months for certain industrial properties and charitable organizations After the exemption period, the property owner may be eligible for a 50% discount on business rates for a further three months.
Another option for business owners with unoccupied properties is to apply for the small business rates relief This relief is available to businesses with a rateable value below a certain threshold, and it provides a discount on business rates Some local councils also offer discretionary relief for unoccupied properties, so it is worth checking with the local authority to see what options are available.
Business owners facing financial difficulties due to unoccupied properties may also be eligible for hardship relief This relief is granted on a case-by-case basis and is intended to help businesses that are struggling to pay their business rates To apply for hardship relief, business owners must provide evidence of their financial situation and explain why they are unable to pay the full amount of business rates.
In some cases, business owners may be able to appeal the rateable value of their property if they believe it has been set too high The appeals process can be complex and time-consuming, so it is advisable to seek professional advice from a chartered surveyor or property consultant If the appeal is successful, the rateable value of the property will be reduced, and business rates will be recalculated accordingly.
Overall, business rates on unoccupied property can be a substantial financial burden for business owners However, there are options available to help alleviate this cost, including exemptions, reliefs, and appeals It is important for business owners to be aware of their obligations regarding business rates and to explore all available avenues for reducing this expense By taking proactive steps and seeking professional advice when needed, business owners can better manage their finances and protect their properties from unnecessary costs.