Business rates can be a significant expense for property owners, especially when a property is sitting empty. In the UK, owners of non-domestic properties such as shops, offices, and warehouses are required to pay business rates, even when the property is not generating any income. However, there are ways to avoid or reduce these rates on empty property. In this article, we will explore some strategies that property owners can use to minimize their business rates liability and protect their bottom line.
One common way to avoid paying business rates on empty property is to qualify for an exemption. Properties that are undergoing major renovation or structural repairs may be eligible for a temporary exemption from business rates. This exemption typically lasts for three months, but can be extended to up to 12 months in certain circumstances. To qualify for this exemption, owners must demonstrate that the property is empty due to these specific reasons, and provide evidence of the renovation works being carried out.
Another exemption that property owners can look into is the Small Business Rate Relief. If the property qualifies as a small business and meets certain criteria, the owner may be able to claim relief on their business rates. This relief can be up to 100% for eligible properties with a rateable value below a certain threshold. This can provide significant savings for small business owners struggling to pay their business rates on empty property.
Alternatively, property owners can consider applying for a Hardship Relief. This relief is granted at the discretion of the local authority and is meant to provide support to property owners who are facing financial hardship. Property owners must demonstrate that paying the full business rates would cause undue financial strain, and provide evidence of their financial circumstances. If approved, the property owner may be granted a reduction in their business rates for a specified period of time.
In some cases, property owners may choose to explore the option of demolishing the property to avoid paying business rates on an empty building. Once a property is no longer standing, it is no longer liable for business rates. However, this strategy may not be suitable for all property owners, as the costs associated with demolishing a building can be significant. Property owners should carefully consider the feasibility and cost-effectiveness of this option before proceeding.
Another way to reduce business rates on empty property is to actively market the property for sale or lease. If the property is actively being marketed, it may qualify for a 50% discount on business rates for up to six months. Property owners must provide evidence of their marketing efforts, such as listing the property with a commercial real estate agent or advertising it on relevant platforms. By actively seeking to find a tenant or buyer for the property, owners can reduce their business rates liability and potentially generate income from the property in the future.
Property owners can also explore the option of negotiating with the local authority for a reduction in their business rates. If the property has been empty for an extended period of time and the owner can demonstrate that efforts have been made to market the property, the local authority may be willing to consider a reduction in the business rates liability. Property owners should be prepared to provide evidence of their marketing efforts and demonstrate that the property is genuinely on the market for rent or sale.
In conclusion, avoiding business rates on empty property is a challenge that many property owners face. By exploring the various exemptions, reliefs, and strategies available, owners can minimize their business rates liability and protect their bottom line. Whether it’s qualifying for a temporary exemption, applying for relief, actively marketing the property, or negotiating with the local authority, there are options available to help property owners reduce the financial burden of empty property. By taking proactive steps and seeking professional advice, property owners can navigate the complex world of business rates and ensure that their empty property does not become a drain on their finances.