Empty properties can be a burden for businesses, especially when they are subject to business rates even though they are not generating any income. Business rates are taxes that businesses have to pay on non-residential properties, including shops, offices, warehouses, and factories. These rates are based on the rateable value of the property and can be a significant expense for businesses, particularly if the property is empty and not generating any income.
Fortunately, there are ways to avoid or reduce business rates on empty property. In this article, we will explore some strategies that businesses can implement to minimize their business rates liability on empty properties.
1. Qualifying for Exemptions
One of the most common ways to avoid paying business rates on empty property is by qualifying for exemptions. There are certain types of properties that are exempt from business rates, such as agricultural land and buildings, fish farms, and certain industrial properties. Businesses should check if their empty property falls under any of these exemptions and apply for them if they do.
2. Claiming Empty Property Relief
Empty Property Relief is another option for businesses looking to reduce their business rates liability on empty property. This relief is available for most non-domestic properties that are empty for a certain period of time. The amount of relief varies depending on the type of property and the local authority, but in general, businesses can claim up to 100% relief for the first three months of the property being empty, and after that, they can still claim 50% relief.
3. Utilizing the Small Business Rate Relief
If the empty property is a small business property, then businesses may be eligible for Small Business Rate Relief. This relief is available for properties with a rateable value below a certain threshold, typically around £12,000 to £15,000. Under this relief, businesses can claim a significant reduction in their business rates, which can help offset the costs of having an empty property.
4. Applying for Charitable Rate Relief
If the empty property is owned by a registered charity or a non-profit organization, businesses may be eligible for Charitable Rate Relief. This relief can provide up to 80% relief on business rates for properties that are used for charitable purposes. Businesses should check with their local authority to see if they qualify for this relief and how they can apply for it.
5. Implementing Temporary Use Strategies
Another way to avoid business rates on empty property is by implementing temporary use strategies. Businesses can consider renting out the property on a short-term basis, hosting pop-up events, or even allowing local artists or community groups to use the space temporarily. By doing so, the property may no longer be considered empty, and businesses can potentially qualify for a different rate category or relief.
6. Negotiating with the Local Authority
Businesses facing financial difficulties due to empty property rates can also consider negotiating with the local authority. In some cases, the local authority may be willing to offer payment plans, deferments, or other arrangements to help businesses manage their rates liability. Businesses should be proactive in reaching out to the local authority and explaining their situation to see if any concessions can be made.
In conclusion, avoiding business rates on empty property is possible with the right strategies in place. By exploring exemptions, relief options, temporary use strategies, and negotiating with the local authority, businesses can minimize their rates liability and alleviate some of the financial burdens associated with empty properties. It is important for businesses to stay informed about the available options and take proactive steps to manage their business rates effectively. By doing so, businesses can better navigate the challenges of owning and managing empty properties and protect their bottom line.