Business rates can be a costly expense for property owners, especially when a property sits empty. In the United Kingdom, empty commercial properties are subject to business rates, which can add up to thousands of pounds each year. However, there are ways to avoid paying these rates and minimize the financial burden on property owners. In this article, we will discuss six tips for avoiding business rates on empty property.
1. Temporary Occupation
One way to avoid business rates on empty property is to temporarily occupy the space. By allowing a temporary tenant to use the property even for a short period of time, the property can be classified as occupied, and therefore exempt from business rates. This could include hosting a pop-up shop, art exhibition, or even allowing a community group to use the space. While this may only provide a temporary solution, it can help reduce the amount of time that the property is considered empty and subject to business rates.
2. Renovation or Repair
Another option to avoid business rates on empty property is to undertake renovation or repair work on the property. By actively working to improve the property, it can be considered as being in use for the purposes of exemption from business rates. This could involve upgrading the facilities, modernizing the interior, or making structural repairs to the building. By demonstrating that the property is undergoing active renovation, property owners may be able to avoid paying business rates on the property.
3. Small Business Rate Relief
Property owners may also be eligible for small business rate relief, which provides a discount on business rates for eligible properties. If the property is rented out to a small business, the tenant may be able to claim small business rate relief, reducing the amount of business rates that need to be paid. This can be a mutually beneficial arrangement for both the property owner and the tenant, as it can help attract tenants to the property while also reducing the financial burden of business rates.
4. Vacant Property Relief
In certain circumstances, property owners may be eligible for vacant property relief, which provides a temporary exemption from business rates for empty properties. This relief is available for certain types of properties, such as newly built properties that have not yet been occupied, properties that are undergoing renovation, or properties that have been listed for sale or rent. By applying for vacant property relief, property owners can avoid paying business rates on empty properties for a specified period of time.
5. Charitable Relief
Property owners who allow charitable organizations to use their empty property may be eligible for charitable relief on business rates. Charitable relief provides a discount on business rates for properties that are used for charitable purposes, such as community centers, charity shops, or other non-profit activities. By partnering with a charitable organization to use the empty property, property owners can not only avoid paying business rates but also support a worthy cause in the process.
6. Appealing the Rateable Value
Property owners who believe that the rateable value of their property is incorrect can appeal to the Valuation Office Agency to have it reassessed. By providing evidence of the property’s true market value, property owners may be able to reduce the rateable value and therefore lower the amount of business rates that need to be paid. While this process can be time-consuming and may require the assistance of a professional surveyor or valuer, it can result in significant savings on business rates in the long run.
In conclusion, there are several strategies that property owners can utilize to avoid paying business rates on empty property. By considering options such as temporary occupation, renovation or repair, small business rate relief, vacant property relief, charitable relief, and appealing the rateable value, property owners can minimize the financial burden of business rates on their empty properties. By taking proactive steps to manage their property effectively, property owners can save money and make their properties more attractive to potential tenants.