Business rates can be a significant cost for property owners, especially when the property is empty In the UK, business rates are charged on most non-domestic properties, including commercial properties like shops, offices, and warehouses However, there are ways to avoid paying business rates on empty property legally In this article, we will discuss some strategies that property owners can use to minimize or eliminate business rates on vacant properties.
1 Claiming Empty Property Relief
One of the most common ways to avoid business rates on empty property is by claiming Empty Property Relief This relief can provide a 100% discount on business rates for eligible properties that have been empty for a specified period In England, most properties are entitled to 3 months of Empty Property Relief, after which the full rate is payable However, certain properties, such as industrial properties, can qualify for an extended period of relief of up to 6 or 12 months.
To claim Empty Property Relief, property owners must notify the local council of the property’s vacancy and provide details of when it became empty It is essential to keep accurate records of when the property was vacated to avoid any disputes with the council.
2 Developing the Property
Another effective way to avoid paying business rates on empty property is by carrying out development work on the property By making improvements or alterations to the property, owners can qualify for Empty Property Relief during the development period This can provide a significant saving on business rates while the property is being redeveloped.
It is important to note that the development work must be substantial and ongoing to qualify for Empty Property Relief Property owners should keep the council informed of the progress of the development to ensure that relief is applied correctly.
3 Letting the Property
If property owners are unable to develop the property themselves, another option is to let the property to a third party avoiding business rates on empty property. By doing so, the responsibility for paying business rates can be transferred to the tenant, relieving the property owner of this financial burden However, it is important to carefully consider the terms of the lease, as the landlord may still be liable for business rates if the tenant defaults on payment.
Before letting the property, property owners should seek professional advice to ensure that the lease agreement is structured in a way that protects their interests Additionally, it is essential to conduct background checks on potential tenants to minimize the risk of non-payment.
4 Applying for Small Business Rate Relief
For owners of smaller properties, another option to reduce business rates on empty property is to apply for Small Business Rate Relief This relief is available to businesses with a rateable value below a certain threshold and can provide a discount of up to 100% on business rates.
To qualify for Small Business Rate Relief, the property must be unoccupied and have a rateable value below the threshold set by the local council Property owners should check the eligibility criteria with the council and submit an application to claim this relief.
5 Temporary Use of the Property
Lastly, property owners can consider temporarily using the property for a different purpose to avoid paying business rates on empty property For example, owners can rent out the property for short-term events or pop-up shops, which can generate income while also providing relief from business rates.
Before using the property for temporary purposes, property owners should check with the local council to ensure compliance with planning regulations and business rates requirements Additionally, it is crucial to keep accurate records of any temporary use of the property to avoid any disputes with the council.
In conclusion, business rates on empty property can be a significant financial burden for property owners However, by exploring the options mentioned above, owners can minimize or eliminate this cost legally From claiming Empty Property Relief to developing or letting the property, there are several strategies that property owners can use to avoid paying business rates on vacant properties By understanding the available relief options and seeking professional advice when necessary, property owners can effectively manage their business rates liabilities and protect their financial interests.