Business rates are a tax that is charged on most non-residential properties in the UK, including shops, offices, factories, and warehouses. The amount of business rates that a property owner has to pay is based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA).
One aspect of business rates that property owners may not be aware of is that they may still have to pay business rates on unoccupied premises. This can come as a surprise to many property owners, who may assume that they are exempt from paying business rates if their property is vacant. However, this is not always the case.
The rationale behind charging business rates on unoccupied premises is to encourage property owners to bring their properties back into use. If property owners were not required to pay business rates on unoccupied premises, there would be less incentive for them to find tenants or buyers for their properties, which could lead to a higher number of vacant properties and a decrease in property values.
There are some exceptions to the rule that business rates must be paid on unoccupied premises. For example, if a property is undergoing major repair work or structural alterations, the property owner may be able to apply for an exemption from paying business rates. In some cases, properties that are empty due to legal reasons, such as a property being repossessed, may also be exempt from paying business rates.
It is important for property owners to be aware of the rules around business rates on unoccupied premises, as failing to pay business rates on an empty property can result in financial penalties and legal action. Property owners should also be aware that they may still be liable for business rates even if they are actively trying to find a tenant or buyer for their property.
One way to mitigate the impact of business rates on unoccupied premises is to apply for empty property relief. Empty property relief can provide property owners with a discount on their business rates for a certain period of time if their property is unoccupied. The amount of the discount and the length of time it is available for will depend on the local authority that the property is located in.
Another option for property owners who are struggling to pay business rates on unoccupied premises is to consider leasing their property on a short-term basis. By leasing their property to a temporary tenant, property owners may be able to generate some income from their property and reduce the amount of business rates that they have to pay.
Property owners who are considering leasing their property on a short-term basis should be aware that they will still be responsible for paying business rates on the property, even if they are not occupying it themselves. However, the temporary tenant may be willing to contribute towards the business rates as part of the lease agreement.
In conclusion, business rates on unoccupied premises can come as an unexpected expense for property owners, but it is important for property owners to be aware of their obligations when it comes to paying business rates. By understanding the rules around business rates on unoccupied premises and exploring options such as empty property relief and short-term leasing, property owners can mitigate the impact of business rates on their vacant properties. As always, seeking advice from a professional such as a property manager or tax advisor can help property owners navigate the complexities of business rates and ensure that they are compliant with the law.