Business rates can be a significant expense for many businesses, but what happens when a property is empty? void business rates, also known as empty property rates, are a concern for landlords and businesses alike. In this article, we will explain what void business rates are, how they are calculated, and what you can do to minimize the impact on your finances.
void business rates are taxes that are charged on commercial properties that are empty. These rates are separate from regular business rates and are meant to incentivize property owners to keep their buildings in use. The idea is that by imposing a tax on empty properties, owners will be more inclined to either rent out the space or put it to other productive use.
The rules surrounding void business rates can be complex and vary depending on the location of the property. In England, for example, empty commercial properties are exempt from business rates for the first three months they are empty. After this initial period, full rates are payable, although some exemptions may apply depending on the circumstances. It is important to check with your local council or rating authority to understand the specific rules that apply to your property.
In Scotland, the rules are slightly different, with empty properties receiving a 10% discount on their business rates for the first three months. After this period, full rates are payable. Wales also has its own set of rules, with empty properties receiving a 50% discount on business rates for the first three months and then being charged the full rate thereafter.
Calculating void business rates can be a complex process, as it depends on the rateable value of the property and the local council’s specific rules. In England, for example, empty commercial properties with a rateable value of less than £2,900 are exempt from business rates altogether. For properties with a rateable value between £2,900 and £15,000, the rates are calculated at a reduced rate. Properties with a rateable value above £15,000 are charged the full rate.
There are some ways to minimize the impact of void business rates on your finances. One option is to negotiate with your local council for a temporary reduction in rates if you can demonstrate that you are actively trying to rent out the property. This can be a good option if you are struggling to find a tenant and need some financial relief while you continue your search.
Another option is to consider short-term lets or pop-up shops to occupy the property temporarily. This can help you avoid paying void business rates while still generating some income from the property. It can also help to keep the property in good condition and prevent it from becoming a target for vandalism or squatting.
Some property owners choose to apply for an exemption from void business rates if the property is undergoing major renovation or repair work. In England, properties that are empty due to structural alterations or repairs may be exempt from business rates for up to 12 months. This can provide a valuable financial reprieve while you make improvements to the property.
It is important to keep in mind that the rules and exemptions surrounding void business rates can change, so it is essential to stay informed and regularly check with your local council or rating authority for updates. By understanding the rules that apply to your property and exploring all available options, you can minimize the impact of void business rates on your finances.
In conclusion, void business rates are an important consideration for property owners and businesses with empty commercial properties. By understanding what void business rates are, how they are calculated, and what you can do to minimize their impact, you can make informed decisions about how to manage your property and finances effectively. With careful planning and proactive measures, you can navigate the complexities of void business rates and ensure that your property remains a valuable asset to your business.