Business rates are a significant expense for business owners, but what happens when a property is unoccupied? In this article, we will explore the implications of business rates on unoccupied premises, also known as ’empty rates’.
Empty rates, as they are commonly referred to, are a major concern for property owners who find themselves with vacant premises. Business rates are a tax on non-domestic properties, including commercial and industrial buildings. These rates are usually paid by the occupier of the property, but what happens when a property is unoccupied or vacant?
In the past, business owners received a temporary exemption on empty properties. However, the government changed the rules in 2008, and now most vacant commercial properties are subject to business rates. The aim of this change was to discourage property owners from leaving premises empty for extended periods of time.
The business rates on unoccupied premises can be a significant financial burden for property owners. In some cases, the rates can be as much as 100% of the normal business rates bill. These rates can quickly add up, especially for large commercial properties or properties in prime locations.
Property owners are required to pay business rates on unoccupied premises after a specified period of time. The specific rules and regulations surrounding empty rates vary by location, so property owners should check with their local council to understand the exact requirements in their area.
One common exemption for empty rates is for properties that are undergoing major renovation or refurbishment. Property owners can apply for an exemption on the grounds that the property is in need of repair or structural alteration. This exemption is typically granted for a period of 3 months, but can be extended in some cases.
Another exemption is for small properties with a rateable value below a certain threshold. These properties are exempt from empty rates entirely, providing some relief to small business owners who may be struggling to find tenants for their properties.
It’s important for property owners to be aware of the rules surrounding business rates on unoccupied premises to avoid penalties and fines. Failure to pay the empty rates can result in legal action, fines, and even repossession of the property by the local council.
One way to mitigate the financial impact of empty rates is to actively market the property for rent or sale. By finding a tenant or buyer quickly, property owners can avoid prolonged periods of vacancy and the associated empty rates. Property owners should also consider offering incentives such as rent-free periods or reduced rates to attract potential tenants.
Some property owners may choose to explore alternative uses for their vacant premises to avoid paying empty rates. For example, a commercial property could be converted into residential apartments or a coworking space. While this may require investment and planning permission, it can provide a viable solution for avoiding empty rates.
In conclusion, business rates on unoccupied premises can be a significant financial burden for property owners. It’s important to be aware of the rules and regulations surrounding empty rates to avoid penalties and fines. By actively marketing the property, exploring alternative uses, and seeking exemptions, property owners can minimize the impact of empty rates on their bottom line.