When it comes to managing commercial properties, one of the biggest headaches for businesses is the issue of paying business rates on empty properties Business rates can be a significant cost that eats into profits, especially when a property is not generating any income However, there are ways to legally avoid paying business rates on empty property, saving your business money in the long run.
Business rates are a tax that is levied on non-domestic properties in the UK They are calculated based on the rateable value of the property, which is determined by the local council When a commercial property is empty, the owner is still liable to pay business rates unless certain exemptions or reliefs apply Here are some strategies that businesses can use to avoid paying business rates on empty property:
1 Apply for Empty Property Relief
One of the most common ways to avoid paying business rates on empty property is to apply for Empty Property Relief This relief is available for most properties that have been unoccupied for a certain period of time, usually three months or more The amount of relief varies depending on the local council, but in most cases, it can range from 50% to 100% of the business rates bill.
To apply for Empty Property Relief, you will need to contact your local council and provide them with information about the property, including the reason for the vacancy and any efforts you have made to find a new tenant It is important to keep detailed records of these efforts, as some councils may request evidence to support your application.
2 Qualify for Exemptions
In addition to Empty Property Relief, there are also certain exemptions that may apply to your property, allowing you to avoid paying business rates altogether For example, properties that are undergoing major structural repairs or renovations may be exempt from business rates for a certain period of time This is known as a “Class A exemption” and can last for up to 12 months.
Similarly, properties that are deemed to be too small to be rated or have a rateable value below a certain threshold may also be exempt from business rates This is known as a “Small Business Rate Relief” and can provide significant savings for businesses that qualify.
3 avoiding business rates on empty property. Consider Temporary Occupations
Another strategy to avoid paying business rates on empty property is to consider temporary occupations This involves allowing a short-term lease or license agreement with a third party to occupy the property temporarily By doing so, the property may become eligible for Small Business Rate Relief or other exemptions, reducing the overall business rates bill.
However, it is important to be cautious when entering into temporary occupation agreements, as they can have legal implications and may affect the property’s overall valuation It is advisable to seek legal advice before proceeding with this option.
4 Negotiate with the Local Council
If you are struggling to pay business rates on empty property, it may be worth reaching out to the local council to discuss your situation In some cases, councils may be willing to offer payment plans or other forms of assistance to help businesses in financial distress.
By being proactive and transparent about your circumstances, you may be able to negotiate a more manageable payment schedule or explore other options for reducing your business rates bill It never hurts to ask, and the council may be more accommodating than you think.
5 Explore Alternative Uses
Finally, if you are unable to avoid paying business rates on empty property through the strategies mentioned above, you may want to consider exploring alternative uses for the property For example, converting the property into a residential dwelling or temporary workspace could qualify for different tax rates or exemptions.
Before making any significant changes to the property, it is important to consult with a tax advisor or legal professional to ensure compliance with relevant regulations and avoid any potential penalties By thinking creatively about how to repurpose the property, you may find a solution that not only saves you money on business rates but also generates additional income in the long term.
In conclusion, paying business rates on empty property can be a significant financial burden for businesses However, by exploring the various options available, such as applying for Empty Property Relief, qualifying for exemptions, considering temporary occupations, negotiating with the local council, and exploring alternative uses, businesses can effectively avoid or reduce their business rates bill It is important to stay informed about the regulations and seek professional advice when needed to ensure compliance and maximize savings By taking proactive steps to manage empty properties, businesses can free up resources to invest in other aspects of their operations and ultimately achieve long-term success.