Business rates are a necessary cost for any business owner, but what happens when a property sits empty? In some cases, empty properties can still be subject to business rates, which can be a hefty expense for property owners. However, there are some ways to avoid or reduce business rates on empty property.
One option for avoiding business rates on empty property is to claim an exemption. In the UK, certain types of properties are exempt from business rates for a set period of time. For example, newly built properties are exempt from business rates for the first three months after they are completed. Similarly, if a property is being used for certain purposes, such as agriculture or for charitable purposes, it may also be exempt from business rates.
It’s important to check with the local council to see if the property qualifies for any exemptions. Providing evidence of the property’s use or purpose can help to support a claim for exemption. If the property does qualify for an exemption, the owner will need to apply to the local council to have the property removed from the business rates list.
Another option for avoiding business rates on empty property is to qualify for a temporary empty property rate. Under this scheme, empty properties are eligible for a reduced rate of business rates for a set period of time. In England, empty commercial properties are eligible for a 100% discount on business rates for the first three months they are empty. After this initial period, the property will be subject to the full business rates unless the owner can demonstrate that the property is still actively being marketed for rent or sale.
Owners of empty properties can also take steps to mitigate their liability for business rates by actively marketing the property. If the property is actively being marketed for rent or sale, owners may be able to qualify for a further six months of a 50% discount on business rates. To qualify for this discount, owners must show evidence that the property is being marketed, such as advertisements, listings, or correspondence with potential tenants or buyers.
In addition to actively marketing the property, owners can also consider making temporary use of the property to avoid paying full business rates. For example, allowing a charity to use the property for a short period of time can qualify the property for an 80% discount on business rates for that period. Similarly, properties that are being redeveloped or refurbished may qualify for a 100% discount on business rates for up to 18 months.
Property owners can also apply for hardship relief if they are struggling to pay the full business rates on an empty property. Hardship relief is granted on a case-by-case basis and is typically reserved for property owners who are experiencing financial hardship. Owners will need to provide evidence of their financial situation, such as bank statements, profit and loss statements, and details of any outstanding debts.
Overall, there are several ways to avoid or reduce business rates on empty property. By claiming exemptions, qualifying for temporary rates, actively marketing the property, making temporary use of the property, and applying for hardship relief, property owners can minimize their liability for business rates. It’s important for property owners to stay informed about their options and to work closely with the local council to ensure that they are taking advantage of any available discounts or exemptions.
In conclusion, while business rates on empty property can be a significant cost for property owners, there are ways to avoid or reduce this expense. By taking advantage of exemptions, qualifying for temporary rates, actively marketing the property, making temporary use of the property, and applying for hardship relief, property owners can minimize their liability for business rates. It’s important for property owners to be proactive in managing their empty properties to avoid unnecessary costs and to protect their bottom line.