Business rates are a significant cost for property owners, and the burden can be even greater for those with vacant properties. Owners of empty commercial properties are still legally required to pay business rates, even if the property is not generating any income. This can create a financial strain for property owners who are struggling to find tenants or who simply have no current use for the property. However, there are strategies that property owners can employ to potentially avoid or reduce their business rates on empty properties. In this article, we will explore six strategies that property owners can use to mitigate the burden of business rates on empty properties.
1. Use the Small Business Rate Relief Scheme
One way to potentially avoid paying business rates on empty property is to take advantage of the Small Business Rate Relief Scheme. This scheme is designed to help small businesses and property owners by reducing the amount of business rates they have to pay. If your property has a rateable value of less than £15,000 (or £12,000 in London), you may be eligible for relief under this scheme. This could result in a 100% reduction in business rates for properties with a rateable value of less than £12,000, and a tapered relief for properties with a rateable value between £12,001 and £15,000.
2. Apply for Empty Property Relief
Another potential way to avoid paying business rates on empty property is to apply for Empty Property Relief. This relief is available to property owners whose properties have been empty for a certain period of time. In England, empty commercial properties with a rateable value of less than £2,900 are exempt from business rates for three months. After this initial three-month period, the property owner may be eligible for a further three-month exemption, subject to certain criteria. Property owners should check with their local council to see if they qualify for Empty Property Relief.
3. Consider Temporary Occupants
One clever way to potentially avoid business rates on empty property is to consider taking on temporary occupants. While this may not be feasible for all properties, it could be a useful strategy for some. By allowing temporary occupants to use the property for a short period of time, property owners may be able to take advantage of various exemptions or reliefs on business rates. For example, if the temporary occupants are a charity or community interest group, the property may be eligible for relief under the Charitable Rate Relief Scheme.
4. Explore the Use of Pop-Up Shops
Another strategy for avoiding business rates on empty property is to explore the use of pop-up shops. Pop-up shops are temporary retail spaces that are often used by smaller retailers, online businesses, or independent brands looking to test out new markets. By allowing a pop-up shop to operate in the empty property, the property owner may be able to take advantage of certain reliefs or exemptions on business rates. Additionally, the presence of a pop-up shop may help attract potential tenants or buyers for the property.
5. Renovate or Redevelop the Property
Property owners may also consider renovating or redeveloping the empty property to potentially reduce their business rates burden. In some cases, properties undergoing renovation or redevelopment may be eligible for relief under the Business Rates Retail Relief Scheme. This scheme provides a 100% relief on business rates for properties that are being brought back into use or undergoing significant refurbishment. By investing in renovating or redeveloping the property, property owners may be able to reduce their business rates liability in the long run.
6. Appeal the Rateable Value
Finally, property owners who believe that the rateable value of their property is inaccurate may consider appealing the valuation to potentially reduce their business rates liability. If you believe that the rateable value of your property is too high, you can submit an appeal to the Valuation Office Agency (VOA). The VOA will review the valuation and determine whether an adjustment is necessary. If the rateable value is reduced as a result of the appeal, the property owner’s business rates liability will also be reduced accordingly.
In conclusion, there are several strategies that property owners can employ to potentially avoid or reduce their business rates on empty properties. By taking advantage of reliefs, exploring temporary uses, or appealing rateable values, property owners can mitigate the financial burden of business rates on vacant properties. Each property owner’s situation is unique, so it’s important to carefully consider which strategies may be most appropriate for your specific circumstances. By proactively managing business rates on empty properties, property owners can help protect their bottom line and potentially attract tenants or buyers in the future.