Vacant properties can be a headache for many business owners, especially when it comes to paying business rates on these empty spaces. However, there are several ways to legally avoid or reduce these charges, saving you money and potential hassle in the long run.
First and foremost, it’s important to understand why business rates are applied to empty properties in the first place. Business rates are a tax on commercial property that helps fund local services such as schools, roads, and waste disposal. These rates are typically charged on most non-domestic properties, including shops, offices, warehouses, and factories. However, exemptions and discounts may apply depending on the specific circumstances of the property.
One common way to avoid paying business rates on empty property is by applying for a temporary exemption. In England, for example, you can get a 100% exemption on business rates for three months for industrial premises and six months for all other properties. This exemption can be extended to up to 12 months for properties undergoing structural repairs or where the property is the subject of a compulsory purchase order.
Another option to consider is applying for a Charitable Exemption or Relief. If your property is used for charitable purposes, you may be eligible for relief from paying business rates. Charities and Community Amateur Sports Clubs (CASCs) can receive an 80% discount on business rates on any non-domestic property they use.
Moreover, Small Business Rate Relief is another avenue to explore. If your property has a rateable value below a certain threshold, you may be eligible for a discount on your business rates. In England, properties with a rateable value of £15,000 or less may qualify for a reduction under this scheme. The amount of relief you receive will depend on the rateable value of your property and your location.
Business owners should also be aware of the Empty Property Rate Relief scheme. Under this scheme, you may be eligible for a 100% exemption on business rates for certain types of empty properties, such as newly built properties or those undergoing renovations. This relief is only available for a limited period, so it’s important to check the specific criteria and deadlines for applying.
In addition to these formal relief options, there are practical steps you can take to reduce your business rates on empty property. One effective strategy is to actively market the property for sale or rent. By demonstrating that you are actively seeking a tenant or buyer for the property, you may be able to qualify for a 50% discount on your business rates for up to three months.
Another proactive approach is to consider short-term leases or licenses for the property. By allowing a temporary tenant to occupy the space on a short-term basis, you can potentially avoid paying full business rates on the property. However, it’s important to carefully consider the terms of any lease or license agreement to ensure that you don’t inadvertently incur additional liabilities.
Ultimately, avoiding business rates on empty property requires a combination of strategic planning, proactive management, and a thorough understanding of the available relief options. By taking advantage of these exemptions, discounts, and practical steps, you can minimize the financial burden of vacant property and make the most of your investment.
In conclusion, navigating the complexities of business rates on empty property can be challenging, but with the right approach, you can save money and protect your bottom line. By exploring the various relief options, actively marketing your property, and considering short-term leasing arrangements, you can effectively manage the costs associated with vacant properties. Remember, seeking advice from a professional advisor or local authority can help you navigate the process and make informed decisions to avoid unnecessary expenses.