As businesses see fluctuations in their demand and revenue, many find themselves with empty commercial properties that are no longer bringing in any income. In such cases, one major concern for businesses is the non-avoidable cost of business rates on these empty properties. However, there are certain provisions and schemes in place that provide rate relief on empty commercial property, offering some financial respite to businesses going through tough times.
The concept of business rates can sometimes be a confusing and burdensome aspect of owning or leasing a commercial property. To put it simply, business rates are taxes levied on most non-domestic properties, including shops, offices, warehouses, and factories. The rateable value of a property, which usually reflects its open market rental value as at a specific date, is used to calculate the business rates payable. Empty properties are not exempt from business rates, and businesses are still required to pay these rates even if their property remains unoccupied.
However, there are certain circumstances in which businesses may be eligible for rate relief on their empty commercial property. The most common form of relief is the Empty Property Rate Relief (EPRR), which provides a temporary exemption from business rates on specific empty properties. In England, most properties are eligible for a 3-month exemption from business rates when they become unoccupied. This period is extended to 6 months for industrial properties.
After the initial vacant period has elapsed, businesses may still qualify for further relief in certain situations. Properties with a rateable value of less than £2,900 are entitled to 100% rate relief until they are reoccupied. Additionally, properties undergoing certain types of repairs or renovations may also be eligible for rate relief. These exemptions can provide much-needed financial support to businesses that are struggling to fill their empty commercial spaces.
Another important consideration for businesses facing empty commercial properties is the possibility of Charitable Rate Relief. Registered charities are eligible for an 80% mandatory relief on business rates for any non-domestic property they occupy. This can be particularly beneficial for charities that run community centers, shops, or offices in commercial properties. Furthermore, charities can apply for discretionary relief for the remaining 20% of their business rates, providing additional financial support.
In addition to the aforementioned schemes, businesses may also qualify for Transitional Relief on their business rates. Transitional Relief helps to ease the burden of sudden and significant increases in business rates bills following a revaluation. This scheme ensures that ratepayers do not face substantial increases in their rates bills immediately after a revaluation. Instead, any changes are phased in gradually over a set period, providing businesses with time to adjust to the new rates.
For businesses facing financial challenges due to empty commercial properties, it is crucial to be aware of the available rate relief schemes and provisions. By applying for Empty Property Rate Relief, Charitable Rate Relief, and Transitional Relief when applicable, businesses can mitigate the financial impact of empty properties on their bottom line. Seeking professional advice from a qualified surveyor or tax advisor can also help businesses navigate the complexities of business rates and identify the most suitable relief options for their specific circumstances.
Overall, rate relief on empty commercial property offers businesses some respite during challenging times. By taking advantage of the available schemes and provisions, businesses can alleviate the financial burden of empty properties and focus on revitalizing their operations. Whether through Temporary Rate Relief, Charitable Rate Relief, or Transitional Relief, businesses have options to help them weather the storm of empty commercial properties and emerge stronger on the other side.
In conclusion, businesses should explore all available avenues for rate relief on empty commercial property to ensure they are making the most of the financial support available to them. With the right strategies in place, businesses can turn empty properties into opportunities for growth and success.