Business rates are an essential tax that all commercial property owners must pay to their local council. These rates are calculated based on the rental value of the property and are used to fund local services such as schools, roads, and public transport. However, what happens when a commercial property is left vacant? This is where void business rates come into play.
void business rates, also known as empty property rates, are the taxes that must be paid on commercial properties that are empty for an extended period. In the past, property owners could receive a full exemption from business rates for up to three months after a property became vacant. However, in an effort to encourage property owners to bring empty properties back into use, the government introduced changes to the regulations on void business rates in April 2008.
Under the new regulations, property owners are no longer entitled to a full exemption from business rates for empty commercial properties. Instead, they must pay the full rate or a reduced rate, depending on the size and type of property. The rules vary depending on the location of the property, but it is generally the case that commercial properties with a rateable value of less than £2,600 are exempt from void business rates for the first three months. After this initial period, the property owner must pay the full rate.
For properties with a rateable value between £2,600 and £15,000, the property owner must pay the full business rates after the initial three-month exemption. However, the government introduced an additional incentive for small businesses in 2014 with the introduction of the Small Business Rate Relief scheme. This scheme allows small businesses with a rateable value of less than £12,000 to receive full relief from business rates, including void business rates if the property is empty.
For properties with a rateable value over £15,000, the property owner must pay the full business rates after the initial three-month exemption. However, there are some exceptions to this rule. For example, agricultural buildings, warehouses, and buildings undergoing major repairs are exempt from void business rates for a longer period. Additionally, certain charitable organizations may be eligible for relief from business rates, including void business rates if the property is empty.
It is important for property owners to understand the implications of void business rates and take steps to minimize their liability. One way to do this is to actively market the property for rent or sale to prevent it from remaining empty for an extended period. By finding a tenant or buyer quickly, property owners can avoid paying void business rates and generate income from the property.
Another option for property owners is to apply for relief or exemptions from void business rates. This may involve demonstrating that the property is undergoing repairs or refurbishments, making it unsuitable for occupation. Property owners may also be eligible for relief if they can prove that they are actively seeking a new tenant for the property.
Property owners should also be aware that there are penalties for non-payment of void business rates. The local council has the authority to take legal action against property owners who fail to pay their business rates on time. This could result in additional charges, court proceedings, and even the repossession of the property.
In conclusion, void business rates are an important consideration for commercial property owners. Understanding the regulations and taking proactive steps can help property owners minimize their liability and avoid unnecessary costs. By staying informed and seeking professional advice when needed, property owners can navigate the complexities of void business rates and ensure that they are compliant with the law.