When a business moves out of a property, the owner is often left with an unoccupied premises that still incurs costs. One of the major expenses that property owners face is business rates on unoccupied premises. These rates can be a significant burden on property owners, especially if the property remains vacant for an extended period. In this article, we will delve into what business rates on unoccupied premises entail and how property owners can navigate this financial challenge.
Business rates are a tax that businesses in the UK must pay on the non-domestic properties they occupy. These rates are used to fund local services and infrastructure, and are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency, an executive agency of HM Revenue and Customs. The business rates are calculated by multiplying the rateable value by the multiplier set by the government.
When a property becomes unoccupied, the responsibility for paying the business rates falls on the property owner. However, the rules surrounding business rates on unoccupied premises can be a bit complex. In most cases, property owners must continue to pay the full business rates on a property that is empty for more than three months. This can be a significant financial burden, especially for property owners who are struggling to find tenants for their premises.
There are a few exceptions to the rule of paying business rates on unoccupied premises. For example, some property owners may be eligible for a discount on their business rates if the property is in need of repair or undergoing structural changes. In these cases, property owners may be able to apply for an exemption or a reduction in their business rates. Additionally, if a property is newly built and has not yet been occupied, property owners may be eligible for a temporary exemption from business rates for a set period.
Another important consideration for property owners facing business rates on unoccupied premises is the impact of empty property rates. Empty property rates are an additional tax that property owners must pay on properties that have been empty for an extended period. The government introduced empty property rates to encourage property owners to bring vacant properties back into productive use. Empty property rates are typically set at 100% of the normal business rates after a property has been empty for a certain period of time.
Property owners facing business rates on unoccupied premises must carefully consider their options for reducing these costs. One option is to explore the possibility of appealing the rateable value of the property. If a property owner believes that the rateable value assigned to their property is incorrect, they can submit an appeal to the Valuation Office Agency. If successful, the rateable value may be reduced, leading to lower business rates.
Property owners may also consider actively marketing their premises to attract new tenants and reduce the amount of time that the property remains unoccupied. By working with a commercial real estate agent or listing the property on online platforms, property owners can increase the visibility of the property and attract potential tenants. Finding a tenant for the property can help alleviate the financial burden of paying business rates on unoccupied premises.
In conclusion, business rates on unoccupied premises can be a significant financial challenge for property owners. Understanding the rules and regulations surrounding business rates on unoccupied premises is crucial for property owners to effectively manage this expense. By exploring options for reducing business rates, appealing rateable values, and actively marketing vacant properties, property owners can navigate the complexities of business rates on unoccupied premises and mitigate the financial impact of empty properties.