Empty property can be a burden for businesses, especially when they are still required to pay business rates on that space Whether it’s due to a change in circumstances or simply being unable to find a new tenant, paying business rates on an empty property can add significant costs to a company’s expenses However, there are ways to avoid or reduce these rates legally.
Business rates are a tax on non-residential properties that are used for business purposes This includes offices, shops, warehouses, factories, and other commercial properties The rates are set by the government and are based on the rateable value of the property If a property is empty, the owner is still liable to pay the rates unless they qualify for an exemption or relief.
One way to avoid paying business rates on empty property is to apply for an empty property relief or exemption In England, for example, properties with a rateable value of less than £2,900 are exempt from business rates when they are empty This exemption applies for the first three months that a property is empty After that, the owner will have to pay the full rates unless they qualify for further relief.
In some cases, properties may be exempt from business rates for longer periods of time For example, if a property is undergoing significant repair or structural changes, the owner may be able to apply for an exemption from rates for up to 12 months This can provide some financial relief during the renovation process.
Another way to avoid paying business rates on empty property is by actively marketing the space for rent or sale If the property is genuinely on the market and efforts are being made to find a new tenant or buyer, the owner may be able to apply for an exemption from rates for up to six months avoiding business rates on empty property. This is known as a “short-term vacant property relief” and can provide some breathing room for owners who are actively seeking to fill the space.
In some cases, owners may choose to demolish a property rather than pay business rates on an empty building If the property is no longer in use and the owner has no plans to redevelop or refurbish the space, demolishing the building can be a way to avoid ongoing rates However, it’s important to note that planning permission may be required for demolition, so owners should consult with local authorities before taking this step.
Owners of empty properties may also be able to reduce their business rates by applying for a “discretionary relief” This type of relief is granted at the discretion of the local council and is designed to provide financial assistance to businesses that are struggling to pay their rates Owners can make a case for why they should qualify for relief, such as economic hardships or other extenuating circumstances.
It’s important for owners of empty properties to stay informed about changes to the regulations surrounding business rates For example, in response to the COVID-19 pandemic, the UK government introduced a temporary relief scheme for businesses affected by the lockdown This included a 100% relief on business rates for retail, hospitality, and leisure businesses for the 2020-2021 tax year Owners of empty properties should keep an eye on these types of relief schemes and see if they qualify for any assistance.
In conclusion, paying business rates on empty property can be a significant financial burden for businesses However, there are ways to avoid or reduce these rates legally By applying for exemptions, actively marketing the property, demolishing the building, or seeking discretionary relief, owners can mitigate the costs of keeping an empty property Staying informed about changes to the regulations and relief schemes can also help owners navigate the complexities of business rates on empty property.