As a business owner, there are a multitude of expenses and costs that you must consider in order to keep your operations running smoothly. One often overlooked expense that can catch many business owners off guard is void business rates. Void business rates refer to the rates that business owners are required to pay on empty commercial properties, even when they are not generating any income.
Void business rates can be a significant burden for business owners, especially when they are already dealing with the financial strain of an empty property. Understanding how void business rates work and what options are available to mitigate these costs is crucial for any business owner.
The Basics of void business rates
When a commercial property becomes vacant, business owners are still required to pay business rates on that property. This is because business rates are charged on the rateable value of a property, rather than on its occupancy status. In other words, business rates are not dependent on whether a property is actually being used for business purposes or generating any income.
The rateable value of a property is assessed by the Valuation Office Agency (VOA) and is based on factors such as the size and location of the property. Business rates are then calculated as a percentage of this rateable value. The exact percentage that business owners are required to pay varies depending on the location and size of the property, as well as other factors.
Mitigating void business rates
Given the significant financial burden that void business rates can impose on business owners, it is important to explore ways to mitigate these costs. One option available to business owners is to apply for empty property relief. Empty property relief allows businesses to receive a discount on their business rates if their property has been vacant for a certain period of time.
In England, for example, businesses are entitled to a 100% relief on their business rates for the first three months that their property is empty. After this initial three-month period, businesses are required to pay the full business rates unless they qualify for additional relief. Different rules apply in Wales, Scotland, and Northern Ireland, so it is important for business owners to check the specific regulations in their area.
Another option for business owners looking to mitigate void business rates is to consider leasing out their property on a short-term basis. By finding a temporary tenant or leasing the property for a short-term event, business owners may be able to generate some income from the property and reduce the amount of void business rates that they are required to pay.
It is also worth exploring whether there are any exemptions or reliefs that apply to your specific situation. For example, certain types of properties, such as agricultural land or buildings with a rateable value below a certain threshold, may be exempt from business rates altogether. Additionally, business owners that are experiencing financial hardship may be eligible for additional relief or support.
Staying Informed and Seeking Advice
Navigating the complexities of void business rates can be challenging for business owners, especially those who are not well-versed in the intricacies of the business rates system. It is important for business owners to stay informed about their rights and obligations regarding void business rates and to seek advice from experts if needed.
There are a variety of resources available to help business owners understand void business rates and identify potential ways to mitigate these costs. Local authorities, business rates advisors, and industry organizations can provide valuable information and guidance to business owners facing void business rates.
Ultimately, being aware of the implications of void business rates and taking proactive steps to address these costs can help business owners avoid unnecessary financial strain and ensure the long-term viability of their business. By staying informed and seeking assistance when needed, business owners can effectively manage void business rates and focus on growing their business.