Empty shops can be a common sight in many towns and cities across the UK. Whether due to changing consumer habits, high rents, or other factors, these vacant premises can have a negative impact on the local economy and community. One often-overlooked aspect of owning an empty shop is the business rates that must still be paid on the property. In this article, we will explore the impact of business rates on empty shops and consider potential solutions to this issue.
Business rates are a tax on non-domestic properties, including shops, offices, and warehouses. The amount of business rates payable is based on the rateable value of the property, which is assessed by the Valuation Office Agency. For empty properties, business rates are still due, although there are certain exemptions and reliefs that may apply.
One of the main challenges of owning an empty shop is the financial burden of paying business rates on a property that is not generating any income. This can be particularly difficult for small businesses or independent retailers who may struggle to cover these costs. In some cases, the business rates on an empty shop can even exceed the rental value of the property, making it financially unsustainable for the owner.
The impact of business rates on empty shops is not only financial but also practical. High business rates can deter potential tenants from renting vacant premises, leading to a cycle of empty shops and declining footfall in the area. This can have a knock-on effect on surrounding businesses, as a high number of vacant properties can give the impression of a neglected or failing high street.
In recent years, there have been calls for reform of the business rates system to better support owners of empty shops. One potential solution is to provide more generous exemptions and reliefs for vacant properties, particularly for small businesses and independent retailers. This could help to alleviate the financial burden of paying business rates on empty shops and encourage owners to bring these premises back into use.
Another option is to introduce a system of variable business rates for empty properties, based on the length of time they have been vacant. This could incentivize owners to actively market and redevelop empty shops, rather than leaving them unused for extended periods. By linking business rates to the occupancy status of a property, local authorities could encourage a faster turnover of vacant premises and stimulate regeneration in struggling high streets.
Some have suggested that business rates on empty shops should be abolished altogether, in order to remove the financial barrier to bringing these premises back into use. While this would certainly benefit owners of vacant properties, there are concerns that it could lead to an increase in deliberate vacancy, as landlords seek to avoid paying business rates on their properties. A balance must be struck between supporting struggling businesses and preventing abuse of the system.
In the meantime, owners of empty shops can explore other options for reducing their business rates liability. For example, properties undergoing renovation or redevelopment may be eligible for relief from business rates for a limited period. Owners can also appeal their rateable value to the Valuation Office Agency if they believe it is inaccurate or unfair, although this process can be lengthy and complex.
Overall, the impact of business rates on empty shops is a complex issue with far-reaching implications for the local economy and community. High business rates can deter potential tenants, stifle regeneration efforts, and contribute to the decline of high streets across the UK. Reforms to the business rates system, such as more generous exemptions for vacant properties, could help to address this issue and support owners of empty shops in bringing these premises back into use.