Business rates can be a significant expense for any business owner, but they can be an even larger burden for those who own empty commercial property Understanding how business rates are calculated and what options are available for reducing or deferring these rates can help property owners navigate this aspect of owning commercial real estate.
Business rates are a tax paid by businesses on non-domestic properties like shops, offices, and warehouses These rates are charged by local authorities and are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rateable value is an estimate of the annual rent the property could fetch on the open market at a specific date.
For vacant commercial properties, the property owner is still responsible for paying business rates unless they qualify for an exemption or relief Empty properties are subject to business rates after they have been empty for a certain period, usually three months for most types of properties The idea behind this rule is to encourage property owners to actively seek tenants for their empty properties and not leave them vacant for extended periods.
However, there are some exemptions and reliefs available for property owners with empty commercial properties The most common exemption is for newly built properties, which are exempt from business rates for the first three months after they are completed This grace period allows property owners to find tenants for their newly built properties without having to pay business rates during that time.
Another exemption is for properties with a rateable value of less than £2,900 These properties are considered small business properties and are eligible for small business rate relief, which can reduce the amount of business rates that need to be paid Properties with a rateable value of less than £12,000 may also be eligible for other types of reliefs, such as transitional relief, which slowly phases in increases in business rates over a period of time.
Property owners may also be able to claim hardship relief if they can demonstrate that paying the full amount of business rates would cause them financial hardship business rates empty commercial property. Hardship relief is granted at the discretion of the local authority and is typically only given in exceptional circumstances Property owners must provide evidence of their financial situation, such as cash flow projections and profit and loss statements, to support their claim for hardship relief.
For property owners who are struggling to pay their business rates, there may be the option to apply for a payment plan or to defer payment Payment plans allow property owners to spread the cost of their business rates over a longer period, making them more manageable Deferring payment is another option for property owners who are experiencing temporary financial difficulties but expect to be able to pay their business rates in the future.
Property owners should be aware that failure to pay business rates can result in legal action by the local authority This can include court proceedings to recover the unpaid rates, as well as additional costs and penalties for late payment It is important for property owners to communicate with the local authority if they are experiencing difficulties with paying their business rates to avoid these consequences.
In conclusion, business rates for empty commercial property can be a challenging aspect of property ownership, but there are options available to help property owners manage this expense By understanding how business rates are calculated and the exemptions and reliefs that may be available, property owners can make informed decisions about how to handle their business rates Seeking advice from a property tax specialist or financial advisor can also help property owners navigate the complexities of business rates and ensure they are paying the correct amount for their empty commercial property.