void business rates, also known as empty property rates, are a significant concern for many businesses, particularly those with vacant commercial properties. In simple terms, void business rates are taxes charged on commercial properties that are unoccupied for an extended period of time. These rates can pose a financial burden on property owners and require careful consideration and planning to avoid undue costs.
Business rates are a form of tax that most non-domestic properties in the UK are required to pay. These rates help fund local services, such as education, transportation, and waste collection, and are calculated based on the rateable value of the property. However, when a property becomes vacant, the property owner may still be liable to pay business rates, albeit at a reduced rate known as void business rates.
The issue of void business rates arises from a change in legislation introduced in 2008, which removed the exemption for empty properties from paying business rates. Prior to this change, empty properties were granted a 50% discount on their business rates for the first three months of vacancy. However, the change in legislation meant that properties that have been vacant for more than three months are now subject to paying the full business rates, unless they qualify for certain exemptions.
For property owners, void business rates can represent a significant financial burden. The longer a property remains empty, the more costly it becomes to maintain and pay the associated business rates. This can be particularly challenging for businesses that are struggling financially or going through a period of transition, as void business rates can eat into already limited resources.
There are, however, certain exemptions and reliefs available to mitigate the impact of void business rates. One such relief is the small business rate relief, which provides a 100% exemption for properties with a rateable value of £12,000 or less. Additionally, properties with a rateable value of between £12,001 and £15,000 may qualify for tapered relief, providing a partial exemption from void business rates.
Property owners may also be eligible for relief if they are actively seeking to let or sell the property. The government introduced the empty property relief scheme to incentivize property owners to bring their vacant properties back into use. Under this scheme, properties that have been empty for more than three months may qualify for a 100% exemption from void business rates for a specified period, typically 3 or 6 months, while they are actively being marketed for let or sale.
Despite these exemptions and reliefs, void business rates remain a significant concern for many property owners. The financial impact of paying full business rates on empty properties can be substantial, especially for businesses that are already facing financial difficulties. As a result, property owners are advised to carefully consider their options and take proactive steps to minimize the impact of void business rates.
One way to reduce the burden of void business rates is to explore alternative uses for the property while it remains vacant. For example, property owners could consider leasing the space for temporary uses, such as pop-up shops, events, or storage facilities, to generate additional income and reduce the cost of void business rates. By utilizing the property in this way, owners can offset some of the financial burden of empty property rates and potentially attract potential tenants or buyers in the process.
In conclusion, void business rates are a significant concern for property owners with vacant commercial properties. The financial burden of paying full business rates on empty properties can be substantial, particularly for businesses that are already facing financial difficulties. However, there are exemptions and reliefs available to mitigate the impact of void business rates, and property owners are advised to explore these options to minimize the financial strain. By proactively managing void business rates and considering alternative uses for vacant properties, property owners can reduce costs and potentially attract tenants or buyers in the process.