Empty properties can be a headache for any business owner. Whether it’s a storefront that’s been sitting vacant for months or an office space that’s gone unused for years, the costs associated with maintaining these empty properties can quickly add up. One of the most significant expenses that owners of empty properties must contend with is paying business rates.
Business rates are a tax that is charged on most non-domestic properties, including commercial properties and premises used for business purposes. The amount that is due is calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). These rates are a significant source of revenue for local authorities and are used to fund local services such as schools, roads, and healthcare.
For business owners who have empty properties, paying business rates can feel like adding insult to injury. Not only are they not generating any income from the property, but they are also having to pay out money for a property that is not being used. This can be particularly challenging for small businesses or independent property owners who may already be struggling to make ends meet.
One of the biggest frustrations for business owners is that the rateable value of a property is based on its market rental value, rather than its actual use. This means that even if a property is sitting empty and not generating any income, the owner is still required to pay business rates based on what the property could potentially be earning if it were rented out. This can result in owners paying thousands of pounds in rates each year for properties that are not bringing in any money.
Another issue that owners of empty properties face is that they are not eligible for many of the exemptions and reliefs that are available to occupied properties. For example, properties that are being refurbished or undergoing repair work may be eligible for a temporary exemption from business rates. However, if a property is simply empty and not being used for any purpose, it is unlikely to qualify for any relief.
In recent years, there have been calls for reform of the system of business rates, particularly in relation to empty properties. Some argue that the current system penalizes property owners for circumstances that are beyond their control, such as changes in the economy or shifts in consumer behavior. There have been proposals to introduce more flexible rates for empty properties, such as a reduced rate for the first few months that a property is empty, to help alleviate the financial burden on owners.
In the meantime, owners of empty properties must find ways to cope with the cost of paying business rates. One option is to try to find a tenant or buyer for the property as quickly as possible. This may involve lowering the rent or offering incentives to attract tenants who may be hesitant to take on a property that has been sitting empty for a long period of time.
Another option is to consider using the property for a different purpose. For example, a vacant office space could be converted into a coworking space or a pop-up shop, generating income and reducing the amount of business rates that must be paid. Alternatively, the property could be rented out for events or short-term leases to bring in additional revenue while a long-term tenant is sought.
Owners of empty properties may also want to consider seeking professional advice on how to reduce their business rates liability. This could involve challenging the rateable value of the property with the VOA or exploring any potential exemptions or reliefs that may apply to their particular situation.
Overall, paying business rates on empty properties can be a significant financial burden for business owners. However, by exploring different options for generating income from the property or seeking professional advice on reducing rates liability, owners can take steps to alleviate some of the financial strain. Ultimately, finding a way to minimize the costs associated with empty properties is crucial for owners looking to protect their bottom line and ensure the long-term sustainability of their business.