Business rates are a tax that is paid by owners or occupiers of non-residential properties, such as shops, offices, and warehouses. These rates are collected by local authorities in order to fund local services. The rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency.
One aspect of business rates that property owners should be aware of is void business rates. These are rates that are still payable even when a property is vacant. This can be a significant concern for property owners, as they may find themselves liable for rates on a property that is not generating any income.
Typically, when a property becomes vacant, the owner or occupier is still required to pay business rates for the first three months that the property is empty. After this initial three-month period, the owner may be entitled to an exemption from paying rates for a further three months, or longer in certain circumstances. However, it is important to note that in most cases, after the initial three-month period, the owner is still liable for 100% of the business rates.
The impact of void business rates on property owners can be significant. If a property remains vacant for an extended period of time, the costs of paying business rates can quickly add up. This can put a strain on the finances of property owners, particularly those who are already struggling to find tenants or buyers for their properties.
There are a few ways in which property owners can reduce the impact of void business rates. One option is to seek a temporary exemption from paying rates. This can be done by contacting the local authority and providing evidence that the property is actively being marketed for rent or sale. If the local authority is satisfied with the evidence provided, they may grant an exemption for a further three months, and in some cases, longer.
Another option for property owners is to seek a reduction in the rateable value of the property. This can be done by appealing to the Valuation Office Agency and providing evidence that the rateable value of the property is too high. If the appeal is successful, the rateable value of the property will be reduced, resulting in lower business rates being payable.
Property owners can also explore other ways to mitigate the impact of void business rates. For example, they may consider entering into short-term leases with pop-up shops or temporary tenants in order to generate some income from the property. This can help to offset the costs of paying business rates while the property is vacant.
It is important for property owners to be proactive in managing void business rates. By taking steps to reduce the impact of these rates, property owners can protect their finances and ensure that their properties remain viable investments.
In conclusion, void business rates can have a significant impact on property owners, particularly those who are struggling to find tenants or buyers for their properties. It is important for property owners to be aware of their obligations when a property becomes vacant and to explore ways to reduce the impact of void business rates. By taking proactive steps, property owners can protect their finances and ensure that their properties remain profitable investments.