When it comes to running a business, there are many costs and expenses that business owners have to factor into their budgets. One of the expenses that can catch many business owners off guard is business rates on unoccupied premises. In this article, we will take a closer look at what business rates on unoccupied premises are, how they are calculated, and what business owners can do to minimize the impact of these rates.
Business rates are a tax that is levied on non-domestic properties in the UK. This tax is used to fund local services such as the police, fire department, and garbage collection. The amount of business rates that a business owner has to pay is determined by the rateable value of their property, which is assessed by the Valuation Office Agency (VOA).
business rates on unoccupied premises are a particular concern for business owners who have vacant properties. In many cases, business owners who have unoccupied premises still have to pay business rates on those properties, even if they are not generating any income. This can be a significant financial burden for business owners, especially if they have multiple unoccupied properties or if the properties have a high rateable value.
The way in which business rates on unoccupied premises are calculated can vary depending on the specific circumstances of the property. However, in general, business rates on unoccupied premises are charged at the same rate as occupied properties for the first three months that a property is empty. After the initial three-month period, the property is then classified as long-term empty and the business rates on the property are increased to 150% of the normal rate.
It is important for business owners to be aware of the implications of business rates on unoccupied premises and to take steps to minimize the impact of these rates. One way that business owners can reduce the amount of business rates that they have to pay on unoccupied premises is to try to qualify for an exemption or relief.
There are several types of exemptions and reliefs that business owners can apply for to reduce their business rates on unoccupied premises. For example, if a property is undergoing renovations or repairs, business owners may be able to apply for a renovation relief, which can provide a 100% exemption from business rates for a specified period of time. Similarly, if a property is unoccupied and is listed as a historic building, business owners may be able to apply for a 100% exemption from business rates under the listed building relief.
In addition to exemptions and reliefs, business owners can also take steps to reduce their business rates on unoccupied premises by actively marketing the property for rent or sale. By demonstrating to the local authorities that they are actively trying to bring the property back into use, business owners may be able to negotiate a reduction in their business rates.
Another option for business owners who are struggling to pay the business rates on unoccupied premises is to consider leasing the property to a charity or community group. Properties that are occupied by charities or community groups may be eligible for a 80% reduction in business rates, which can help to offset the cost of the rates.
It is important for business owners to be proactive in managing their business rates on unoccupied premises. By understanding how business rates are calculated and exploring the various exemptions and reliefs that are available, business owners can minimize the financial impact of having unoccupied properties. Additionally, by actively marketing the property for rent or sale and considering leasing the property to a charity or community group, business owners can take steps to reduce their business rates and bring their properties back into use.
In conclusion, business rates on unoccupied premises can be a significant financial burden for business owners. However, by understanding how these rates are calculated and exploring the various exemptions and reliefs that are available, business owners can take steps to minimize the impact of these rates. By actively managing their business rates on unoccupied premises and taking proactive steps to bring their properties back into use, business owners can reduce their financial burden and ensure that their properties are contributing to the local economy.