Business rates can be a significant financial burden for property owners, especially when their properties sit empty. In the United Kingdom, owners of commercial properties are required to pay business rates on any property that is not in use. However, there are ways to avoid these rates and alleviate some of the financial strain.
One of the most common ways to avoid paying business rates on empty property is to qualify for an exemption. The government provides certain exemptions for property owners who meet specific criteria. For instance, properties that are undergoing major repairs or refurbishment may be eligible for a temporary exemption from business rates. This exemption can usually last for up to 3 months, with a possible extension to 6 months in certain cases.
Another exemption that property owners can qualify for is the Charitable Exemption. If a property is being used by a registered charity or a community amateur sports club, the owner may be exempt from paying business rates. This exemption also applies if the property is used for a charitable purpose, even if it is not being used by a registered charity.
Additionally, properties that are considered to be unsafe or uninhabitable may also be exempt from business rates. If a property is deemed unfit for occupation due to health and safety concerns, the owner may not be required to pay business rates until the property is brought up to the required standards.
In some cases, property owners may be able to claim an exemption if the property is listed as a ‘listed building’. Listed buildings are often subject to strict regulations and restrictions, which can make them unsuitable for occupation. As a result, owners of listed buildings may be exempt from paying business rates on the property.
For property owners who are unable to qualify for an exemption, there are still other options available to reduce the financial burden of business rates on empty property. One common strategy is to lease the property to a short-term tenant. By doing so, the property will be considered occupied, and the owner will not be required to pay business rates.
Another option is to apply for a ‘small business rates relief’. This relief is available to properties with a rateable value below a certain threshold, and can significantly reduce the amount of business rates owed. Property owners can apply for this relief through their local council, and in some cases, may even be able to backdate the relief to previous years.
Alternatively, property owners can consider demolishing the property to avoid paying business rates altogether. Once a property has been demolished, it is no longer subject to business rates, as long as the land remains vacant. While this may be a drastic measure, it can be an effective way to avoid the ongoing cost of business rates on an empty property.
It is important for property owners to be proactive in managing their empty properties to avoid unnecessary financial strain. By exploring exemptions, leasing options, and relief programs, owners can find ways to reduce or eliminate the burden of business rates on their properties. Additionally, seeking professional advice from a tax advisor or accountant can help property owners navigate the complex regulations surrounding business rates and ensure they are taking full advantage of any available exemptions or relief programs.
In conclusion, avoiding business rates on empty property is possible through various exemptions, relief programs, and strategies. Property owners should be proactive in exploring their options and seeking professional advice to manage their empty properties effectively and reduce the financial burden of business rates. By taking advantage of available exemptions and relief programs, property owners can alleviate some of the financial strain and make the most of their investment in commercial property.