When it comes to owning and managing commercial property, one of the major expenses that property owners face is business rates. These rates are taxes that must be paid on most non-domestic properties, including shops, offices, warehouses, and factories. However, there are ways to legally avoid paying business rates on empty property, saving property owners significant amounts of money. In this article, we will discuss some of the strategies that property owners can use to avoid business rates on empty properties.
One of the most common ways to avoid business rates on empty property is to apply for exemption or relief. In the UK, empty properties are generally exempt from business rates for the first three months. After this initial three-month period, property owners can apply for further exemptions or reliefs, depending on their specific circumstances. For example, certain types of buildings, such as listed buildings or properties that are undergoing major renovations, may be eligible for extended exemptions.
Property owners can also consider leasing out their empty property to charity organizations. Under current regulations, property owners can claim 80% relief on their business rates if they lease their property to a registered charity for a minimum period of six weeks. This option not only helps property owners save money on business rates but also allows them to contribute to a good cause by supporting charitable organizations.
Another strategy for avoiding business rates on empty property is to use the property for storage purposes. Property owners can lease their empty property to storage companies, which can then use the space to store their clients’ goods. This usage classifies the property as a storage facility, which is subject to much lower business rates compared to other types of properties. By utilizing their empty property for storage, owners can significantly reduce their business rates expenses.
Additionally, property owners can consider applying for business rates relief if they are experiencing financial hardship. In some cases, property owners may be eligible for relief if they can demonstrate that their property is unoccupied due to financial difficulties. By providing relevant financial information and supporting documents, property owners can appeal to the local council for relief on their business rates. This option provides temporary relief for property owners facing financial challenges but can be a valuable resource in times of need.
Furthermore, property owners can explore the option of appealing their property’s rateable value. The rateable value of a property is used to calculate the amount of business rates that must be paid. If property owners believe that the rateable value of their property is inaccurate or outdated, they can file an appeal with the Valuation Office Agency (VOA) to have it reassessed. A lower rateable value would result in lower business rates, providing property owners with long-term savings on their expenses.
It is important for property owners to stay informed about changes in business rates regulations and available reliefs. The local council and government may introduce new schemes or incentives to help property owners reduce their business rates expenses. By staying up-to-date with these developments, property owners can take advantage of any new opportunities to save money on their empty properties.
In conclusion, avoiding business rates on empty property is a significant concern for property owners, given the substantial expenses involved. By utilizing strategies such as exemptions, leasing to charities, storage usage, financial hardship relief, rateable value appeals, and staying informed about regulations, property owners can effectively reduce their business rates expenses. These strategies provide property owners with valuable options to save money and maximize their returns on investment. By taking proactive steps to manage their empty properties, owners can protect their financial interests and ensure the profitability of their real estate investments.