Void business rates, also known as empty property rates, can be a significant financial burden for businesses that own or lease commercial properties. These rates are imposed by local authorities on properties that are unoccupied and can have a significant impact on a company’s bottom line. In this article, we will discuss what void business rates are, how they are calculated, and what businesses can do to mitigate their impact.
What are void business rates?
Void business rates are taxes that are levied on commercial properties that are unoccupied for a certain period of time. These rates were introduced as a way to discourage property owners from leaving their properties empty for extended periods, thereby encouraging them to either occupy or sell the property. The idea behind these rates is to ensure that all properties contribute to the local economy and prevent derelict buildings from blighting the local area.
How are void business rates Calculated?
The calculation of void business rates can vary depending on the location of the property and the length of time it has been unoccupied. In most cases, properties are eligible for a full exemption from business rates for the first three months that they are empty. After this initial period, the rates are set at the standard rateable value of the property, often resulting in a significant financial burden for businesses.
It is important to note that some properties may be eligible for a reduced rate of void business rates, such as properties that are undergoing refurbishment or reconstruction. However, these reductions are limited and may not fully alleviate the financial impact of empty property rates.
How Can Businesses Mitigate the Impact of void business rates?
There are several ways that businesses can mitigate the impact of void business rates on their finances. One option is to actively market the property for rental or sale in order to reduce the time that it is unoccupied. By finding a new tenant or buyer quickly, businesses can avoid the full brunt of void business rates.
Another option is to consider occupying the property themselves, even if only on a temporary basis. By using the property for short-term purposes, such as pop-up shops or temporary offices, businesses can avoid paying void business rates and generate income in the process.
Businesses may also wish to explore the option of negotiating with the local authorities to reduce or defer void business rates. In some cases, councils may be willing to work with businesses to find a mutually beneficial solution that eases the financial burden of empty property rates.
Finally, some businesses may choose to seek professional advice from property experts or tax advisors to explore other options for mitigating the impact of void business rates. These experts can provide guidance on tax relief schemes, exemptions, and other strategies for reducing the financial burden of empty property rates.
In conclusion, void business rates can present a significant financial challenge for businesses that own or lease commercial properties. By understanding how these rates are calculated and exploring strategies for mitigating their impact, businesses can navigate the complexities of empty property rates and protect their bottom line. Whether through finding new tenants, occupying the property temporarily, or negotiating with local authorities, there are options available for businesses to alleviate the financial burden of void business rates.