Empty properties can be a significant financial burden for businesses, especially when they are subjected to business rates. Business rates are a tax on non-domestic properties that need to be paid by the owners or occupiers of commercial buildings. However, there are ways to mitigate or even avoid paying business rates on empty property. In this article, we will explore some strategies that businesses can use to avoid business rates on empty property and reduce their financial liabilities.
One of the most common ways to avoid business rates on empty property is by applying for exemptions or discounts. In England, businesses are usually exempt from paying business rates on empty properties for the first three months after they become unoccupied. This initial three month period provides businesses with a grace period to find new tenants or sell the property without incurring additional financial liabilities.
After the initial three month exemption period, businesses may still qualify for additional discounts on their business rates. For instance, if a property is vacant and in need of repair, the owner may be eligible for a 50% discount on their business rates for up to 12 months. This can provide businesses with some much-needed financial relief while they work on getting the property back into a rentable condition.
Another strategy for avoiding business rates on empty property is by actively using the property for charitable purposes. In England, properties that are used by registered charities for charitable purposes are eligible for an 80% discount on their business rates, even if the property would otherwise be classified as empty. By partnering with a charitable organization and allowing them to use the property rent-free, businesses can significantly reduce their business rates liabilities while also supporting a worthy cause.
Alternatively, businesses can consider applying for a temporary exemption on their business rates if they can demonstrate that they are actively seeking new tenants for the property. In some cases, businesses may be eligible for a 100% exemption on their business rates for up to six months while they search for new tenants. This can provide businesses with the time they need to find a suitable tenant without incurring additional financial burdens.
Businesses that own multiple properties can also take advantage of a special relief scheme known as the Small Business Rates Relief (SBRR). Under this scheme, businesses that own multiple properties with a rateable value of less than £2,900 each may qualify for a 50% discount on their business rates. This can be a significant savings for businesses that own multiple empty properties and are struggling to keep up with their financial obligations.
Finally, businesses that are unable to avoid paying business rates on empty property should consider other cost-saving measures to offset their financial liabilities. For instance, businesses can explore alternative uses for the property, such as renting it out for storage or hosting events. By generating income from the property, businesses can help offset the cost of business rates and reduce the financial impact of having an empty property.
In conclusion, there are several strategies that businesses can use to avoid paying business rates on empty property. By taking advantage of exemptions, discounts, and relief schemes, businesses can reduce their financial liabilities and minimize the impact of having empty properties on their bottom line. Additionally, businesses can explore alternative uses for empty properties to generate income and offset the cost of business rates. By being proactive and strategic in managing their empty properties, businesses can navigate the complexities of business rates and protect their financial interests.