When it comes to owning commercial property, one of the biggest concerns for landlords and property owners is the issue of business rates for empty commercial properties These rates can often be a significant financial burden, especially if the property remains unoccupied for an extended period of time In this article, we will explore what business rates are, how they are calculated, and what options are available for those struggling to pay them.
Business rates, also known as non-domestic rates, are a tax on commercial properties in the UK They are charged by local authorities and are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The money generated from business rates is used to fund local services such as schools, roads, and social care.
One of the most controversial aspects of business rates is the issue of rates for empty commercial properties In the past, owners of empty commercial properties enjoyed a 100% exemption from paying business rates for the first three months the property was empty However, as of April 2020, the government introduced a new legislation that reduced the exemption period to just three weeks for retail and leisure properties and six months for industrial properties.
This change has had a significant impact on property owners, especially those who are struggling to find tenants for their empty properties The shortened exemption period means that owners are now liable to pay business rates much sooner, even if they are unable to generate any income from the property.
Calculating business rates for empty commercial properties can be a complex process The rateable value of the property is used as a basis for calculating the rates, and this value is reassessed every five years by the VOA business rates empty commercial property. The actual amount of business rates payable is then determined by applying a multiplier set by the government to the rateable value.
For example, if a property has a rateable value of £20,000 and the government’s multiplier is 50p, the business rates payable would be £10,000 per year This amount can add up quickly, especially for larger commercial properties with higher rateable values.
So, what options are available for property owners who are struggling to pay business rates for their empty commercial properties? One possible solution is to apply for a hardship relief scheme, which allows local authorities to grant a discount on business rates for properties that are experiencing financial difficulties.
Another option is to consider leasing the property out on a short-term basis to a charity or community interest company Properties that are used for charitable purposes are eligible for an 80% discount on business rates, which can provide some relief for property owners who are struggling to find tenants.
Property owners can also consider appealing the rateable value of their property if they believe it has been assessed incorrectly by the VOA This process can be time-consuming and complex, but if successful, it could result in a lower rateable value and a reduction in business rates payable.
Ultimately, the issue of business rates for empty commercial properties is a complex and challenging one for property owners to navigate The recent changes to the legislation have made it even more difficult for owners to manage the financial burden of empty properties.
As the government continues to review and update business rates regulations, it is important for property owners to stay informed and seek professional advice if they are struggling to pay their business rates By exploring all available options and understanding the calculation process, property owners can better manage the financial impact of empty commercial properties and work towards finding a solution that works for them.
In conclusion, business rates for empty commercial properties can be a significant financial burden for property owners Understanding how these rates are calculated and exploring options for relief can help property owners navigate this complex issue and work towards a solution that meets their needs While the recent changes to the legislation have made it more challenging, seeking professional advice and staying informed can help property owners manage the impact of business rates on their empty commercial properties.