Business rates can be a significant financial burden for property owners, especially when their property sits empty. These rates are charged on most non-domestic properties, including shops, offices, and warehouses, and can amount to thousands of pounds each year. However, there are ways to avoid paying business rates on empty property legally. In this article, we will explore some of the tactics that property owners can use to reduce or eliminate their business rates liability.
### Understanding Empty Property Rates
When a commercial property becomes vacant, the local council may grant a full exemption from business rates for the first three months that the property is empty. After this initial period, the property owner is typically required to pay full business rates unless certain exemptions or reliefs apply.
### Short-Term Leasing or Licensing
One way to avoid paying business rates on an empty property is to lease or license it on a short-term basis. By doing so, the property can qualify for empty property relief, which grants a 100% exemption from business rates for up to six months (or twelve months for industrial properties). This can provide temporary relief for property owners while they search for a long-term tenant.
### Temporary Use
Another option for avoiding business rates on empty property is to put it to temporary use. For example, the property could be used for community events, pop-up shops, or short-term exhibitions. By demonstrating that the property is being actively used, property owners may be able to qualify for exemptions or reduced rates under certain circumstances.
### Renovation or Repair
If a property is under renovation or undergoing repair work, property owners may be able to claim a partial exemption from business rates. This can be especially beneficial for properties that require significant refurbishment before they can be leased to a new tenant. While the property is being worked on, the owner may be able to secure a reduced rate or even a full exemption from business rates.
### Discretionary Relief
In some cases, local councils may offer discretionary relief to property owners facing financial hardship due to business rates on empty property. Property owners can apply for this relief and make a case for why they should be granted a reduction or exemption. While discretionary relief is not guaranteed, it can be a valuable option for property owners struggling to pay their business rates.
### Vacant Property Rate Relief
For properties that have been empty for an extended period of time, property owners may be eligible for vacant property rate relief. This relief provides a substantial reduction in business rates for properties that have been vacant for over three months (or six months for industrial properties). To qualify for this relief, property owners must demonstrate that they are actively seeking tenants for the property.
### Appealing Rateable Value
Property owners can also consider appealing the rateable value of their property to reduce their business rates liability. If the rateable value of the property is deemed to be too high, property owners may be able to secure a reduction in their business rates bill. This process can be complex and time-consuming, but it has the potential to result in significant savings for property owners.
### Conclusion
Business rates on empty property can be a significant financial burden for property owners, but there are ways to reduce or eliminate this liability. By understanding the various exemptions, reliefs, and strategies available, property owners can take proactive steps to avoid paying full business rates on their vacant properties. Whether through short-term leasing, temporary use, renovation, or appealing rateable values, property owners have options for managing their business rates effectively. By exploring these tactics and seeking guidance from tax professionals, property owners can navigate the complexities of business rates and minimize their financial obligations.