business rates on unoccupied premises, also known as empty property rates, are a significant concern for many business owners and commercial property owners. These rates are a tax charged on commercial properties that are unoccupied for a certain period of time. The rules and regulations surrounding business rates on unoccupied premises can be complex and confusing, so it’s important for business owners to understand how they work and what they can do to mitigate the costs.
In the United Kingdom, business rates are a tax based on the rateable value of commercial properties. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate the amount of business rates that a property owner has to pay. This tax is levied by local authorities to fund local services and amenities.
When a commercial property becomes unoccupied, the owner is still liable to pay business rates on the property. However, there are some exemptions and relief schemes available to reduce the financial burden on property owners. For example, properties that are unoccupied for a short period of time, typically three months, are granted a 100% exemption from business rates. After the initial three-month period, the property owner is required to pay the full business rates unless they qualify for one of the available relief schemes.
One of the relief schemes available to property owners is the Small Business Rate Relief (SBRR) scheme. This scheme provides a discount on business rates for small business owners with only one property that has a rateable value below a certain threshold. Properties that are unoccupied but would have qualified for SBRR if they were occupied are still eligible for the relief. This can provide much-needed financial support for small business owners who are struggling with the costs of unoccupied premises.
Another relief scheme that property owners may be eligible for is the Retail Discount scheme. This scheme provides a one-third discount on business rates for retail properties that are unoccupied for a certain period of time. This can be a significant saving for retail property owners who are facing financial difficulties due to the high costs of business rates on unoccupied premises.
It’s important for property owners to be aware of the relief schemes available to them and to take advantage of them to reduce the financial impact of unoccupied premises. By applying for these relief schemes, property owners can save a substantial amount of money on business rates and alleviate some of the financial strain that comes with owning unoccupied commercial properties.
In addition to relief schemes, property owners can also take steps to minimize their business rates on unoccupied premises. For example, if the property is temporarily unoccupied due to renovations or repairs, the owner can apply for a property renovation relief. This relief allows property owners to claim a 50% discount on business rates for up to 12 months while the property is being renovated. This can be a significant saving for property owners who are investing in their property but are unable to generate income from it during the renovation period.
Property owners can also consider leasing out the unoccupied premises on a short-term basis to avoid paying full business rates. By leasing the property to a temporary tenant, the property owner can be eligible for the 100% exemption from business rates for the duration of the lease. This can be a cost-effective way to generate income from the property while reducing the financial burden of business rates on unoccupied premises.
Overall, business rates on unoccupied premises can be a significant cost for property owners, but there are relief schemes and strategies available to help mitigate the financial impact. By understanding the rules and regulations surrounding business rates and taking advantage of the relief schemes available, property owners can reduce the financial strain of owning unoccupied commercial properties.