When it comes to owning commercial property, one of the key considerations for landlords and property owners is the business rates that they are required to pay Business rates are a form of tax that is charged on most non-domestic properties in the UK, including commercial properties such as shops, offices, and warehouses However, one area that often causes confusion and concern for property owners is the issue of business rates on empty commercial property.
Business rates on empty commercial property can be a significant financial burden for landlords, especially if the property remains unoccupied for an extended period of time In this article, we will explore the implications of business rates on empty commercial property and provide some insight into how property owners can mitigate this cost.
The first thing to understand about business rates on empty commercial property is that, in most cases, they still need to be paid even if the property is vacant This is because business rates are charged on the basis of the rateable value of the property, which is assessed by the Valuation Office Agency (VOA) The rateable value is used to calculate the amount of business rates that are due each year, and this is a cost that property owners cannot avoid, even if they are not generating any income from the property.
One way in which property owners can reduce their business rates liability on empty commercial property is by claiming an exemption Under current legislation, properties that are empty and undergoing repair or structural alterations are entitled to a 100% exemption from business rates for a period of three months After this initial three-month period, the property owner will be required to pay the full amount of business rates unless they can demonstrate that the property is still undergoing significant repairs or alterations.
Another option for property owners is to apply for a temporary reduction in their business rates liability if the property has been vacant for an extended period of time In some cases, the local authority may be willing to grant a discount on the business rates for a limited period to help offset the financial impact of the property being empty business rates empty commercial property. However, this will be at the discretion of the local authority and will depend on the specific circumstances of the property in question.
Property owners should also be aware of the exemptions available for certain types of properties, such as listed buildings or properties that are small enough to qualify for small business rates relief It is important for property owners to familiarize themselves with the various exemptions and relief schemes that are available to them in order to minimize their business rates liability.
In recent years, there has been growing concern among property owners about the impact of business rates on empty commercial property, particularly in light of the economic challenges brought about by the COVID-19 pandemic Many businesses have been forced to close their doors temporarily or permanently due to lockdown restrictions, resulting in a higher number of vacant commercial properties across the country.
The government has recognized the need to support businesses and property owners during these challenging times and has introduced a number of measures to help alleviate the financial burden of business rates on empty commercial property For example, the government announced a temporary extension to the existing 100% exemption for empty commercial properties, providing relief for property owners for an additional three months.
Furthermore, the government has also introduced a business rates holiday for retail, hospitality, and leisure businesses in England for the 2021-2022 tax year This means that eligible businesses do not have to pay business rates for the entire year, regardless of whether their properties are occupied or empty These measures have been welcomed by businesses and property owners alike, providing much-needed financial support during a time of unprecedented uncertainty.
In conclusion, business rates on empty commercial property can be a significant financial burden for landlords and property owners, especially during a time of economic uncertainty However, there are options available to property owners to help reduce their business rates liability, such as claiming exemptions, applying for temporary reductions, and taking advantage of relief schemes.
By staying informed and proactive in managing their business rates obligations, property owners can minimize the financial impact of owning empty commercial property and ensure that they are able to navigate the challenges of the current economic landscape.