When it comes to owning commercial property, one of the biggest concerns for landlords and property owners is the burden of business rates. Business rates are a tax that commercial property owners must pay to local authorities, based on the rateable value of the property. However, there are ways to legally avoid paying business rates on empty properties. In this article, we will discuss some strategies that property owners can use to minimize or eliminate their business rates liability on vacant properties.
One of the most effective ways to avoid paying business rates on an empty property is to take advantage of the government’s Empty Property Rate Relief scheme. Under this scheme, commercial properties that have been vacant for a certain period of time are eligible for relief on their business rates. In England, properties that have been empty for three months or more are eligible for 100% relief for the first three months, and 50% relief thereafter. In Wales, properties that have been empty for three months or more are eligible for rates relief of 100% for the first six months, and 50% thereafter.
To qualify for Empty Property Rate Relief, property owners must inform their local council that the property is vacant and provide evidence to support their claim. This may include photographs of the property showing that it is empty, details of any marketing activities that have been undertaken to try to find a new tenant, and any other relevant information that demonstrates that the property is genuinely vacant.
Another strategy for avoiding business rates on empty property is to temporarily use the property for a different purpose. For example, property owners can rent out the property for short-term uses such as pop-up shops, events, or temporary storage. By temporarily using the property in this way, the property may be classified as occupied rather than vacant, and therefore exempt from business rates. Property owners should check with their local council to ensure that they are compliant with the rules and regulations surrounding temporary use of commercial properties.
Alternatively, property owners can consider applying for Small Business Rate Relief if the property qualifies as a small business. Small Business Rate Relief is a government scheme that provides relief on business rates for small businesses with a rateable value below a certain threshold. By applying for Small Business Rate Relief, property owners may be able to reduce or eliminate their business rates liability on vacant properties.
Property owners can also consider appealing their business rates assessment if they believe that the rateable value of the property has been overvalued. In order to appeal their business rates assessment, property owners must provide evidence to support their claim, such as rental information for similar properties in the area, details of any repairs or renovations that have been carried out on the property, and any other relevant information that may affect the value of the property. Property owners should seek advice from a professional surveyor or valuer to help them prepare their appeal and maximize their chances of success.
It is important for property owners to keep in mind that there are strict penalties for non-payment of business rates, and failing to pay business rates on time can result in legal action being taken against the property owner. Therefore, it is crucial for property owners to explore all available options for avoiding business rates on empty property and to ensure that they are in compliance with the relevant regulations and requirements.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property, including taking advantage of Empty Property Rate Relief, temporarily using the property for a different purpose, applying for Small Business Rate Relief, and appealing their business rates assessment. By exploring these options and seeking professional advice where necessary, property owners can minimize or eliminate their business rates liability on vacant properties, and ensure that they are in compliance with the law.