When it comes to running a successful business, there are many factors that need to be considered. One of these factors that often gets overlooked is the issue of empty business rates. These rates can have a significant impact on a business’s bottom line, and understanding how they work is crucial for any business owner.
empty business rates are essentially taxes that are levied on commercial properties that are empty or unoccupied. The idea behind these rates is to encourage property owners to keep their properties occupied and in use, rather than letting them sit empty. However, these rates can often be a burden for businesses that are struggling financially or are in the process of moving locations.
The rateable value of a property is used to calculate the amount of empty business rates that need to be paid. This value is assessed by the Valuation Office Agency (VOA) and is based on factors such as the size and location of the property. The actual rates that are charged can vary depending on the local authority, but they are generally set at around 50% of the property’s rateable value.
For businesses that are facing financial difficulties, empty business rates can be a significant burden. Not only do these rates need to be paid on top of any other business expenses, but they can also be a barrier to moving locations or downsizing. This is because even if a business moves to a smaller or cheaper property, they may still be liable to pay empty business rates on their old property until it is reoccupied.
In some cases, businesses may be eligible for exemptions or relief from empty business rates. For example, properties that are empty for less than three months are exempt from paying these rates. Additionally, certain types of properties such as industrial premises or those that are undergoing renovation may qualify for relief from empty business rates.
However, navigating the world of empty business rates can be complex and confusing for business owners. This is why it is important to seek advice from a qualified professional such as a chartered surveyor or tax accountant. These professionals can help businesses understand their obligations when it comes to empty business rates and can also provide guidance on how to minimize the impact of these rates on their bottom line.
One way that businesses can potentially reduce their empty business rates liability is by temporarily occupying their property with a charity or community group. Properties that are occupied by these types of organizations for a short period of time may be eligible for relief from empty business rates. This can be a win-win situation for both the business owner and the charity or community group, as the property owner can reduce their rates liability while the organization benefits from having a temporary space to operate from.
Another option for businesses that are struggling with empty business rates is to consider entering into a business rates pooling arrangement. This involves pooling the rateable values of multiple properties together in order to reduce the overall rates liability. This can be a complex process, but it can be a viable option for businesses that have multiple properties that are all facing empty business rates.
Ultimately, empty business rates are a complex issue that many businesses struggle to navigate. However, by understanding how these rates work and seeking professional advice, businesses can take steps to minimize the impact of empty business rates on their bottom line. Whether it’s exploring exemptions and relief options or considering alternative arrangements such as business rates pooling, there are ways for businesses to mitigate the burden of empty business rates and focus on what’s most important – running a successful and thriving business.