When it comes to running a business, there are numerous expenses that one must account for. From rent and utilities to inventory and staff wages, the costs can quickly add up. However, one expense that often catches business owners off guard is business rates on unoccupied premises.
For those unfamiliar, business rates are a tax that all businesses in the UK must pay on the non-domestic property they occupy. This tax helps fund local services such as schools, roads, and waste collection. The amount each business pays is determined by the rateable value of the property they occupy, which is set by the Valuation Office Agency.
But what happens when a business premises becomes unoccupied? Are business rates still due on a vacant property? The short answer is yes, but there are certain exceptions and reliefs that business owners should be aware of.
First and foremost, it’s important for business owners to understand that they are still liable to pay business rates on an unoccupied property, even if they are no longer using it for their business. This is because the property still holds value and benefits from local services, regardless of whether it is being used by a business or not.
However, there are certain exemptions that business owners can apply for if their property is unoccupied. For example, properties that are undergoing major repairs or structural changes may be eligible for a 100% relief on business rates for up to 3 months. This can provide much-needed financial relief for businesses that are investing in renovating their premises.
Similarly, newly built properties are also eligible for a 100% relief on business rates for up to 3 months after they are completed. This is intended to incentivize developers to bring new properties onto the market without being penalized with business rates while the property is vacant.
Additionally, businesses that are unable to find a tenant for their property may be eligible for a 100% relief on business rates for up to 6 months. This can provide some much-needed breathing room for businesses that are struggling to fill their vacant premises.
It’s worth noting that these exemptions and reliefs are subject to certain conditions and restrictions, so it’s important for business owners to seek advice from their local council or a professional advisor to determine what options are available to them.
In some cases, business owners may be required to pay a reduced rate of business rates on unoccupied premises. This is known as the Empty Property Rate, which is set at 50% of the full business rate for most properties that have been unoccupied for over 3 months. This rate is intended to encourage property owners to actively seek tenants for their vacant premises, rather than letting them sit empty.
However, there are some exceptions to the Empty Property Rate. For example, properties that are used for certain purposes such as storing furniture or equipment may be eligible for a full exemption from business rates. Additionally, properties that are listed buildings may be eligible for a full exemption from business rates, regardless of how long they have been unoccupied.
Overall, business rates on unoccupied premises can be a significant expense for business owners, especially if they are struggling to find a tenant for their property. However, by understanding the exemptions and reliefs that are available, business owners can mitigate the financial impact of vacant premises and focus on finding a suitable tenant to occupy their property.
In conclusion, business rates on unoccupied premises are a necessary expense that all business owners must account for. While it may seem unfair to pay rates on a property that is not being used for business purposes, there are exemptions and reliefs available to help ease the financial burden. By seeking advice from their local council or a professional advisor, business owners can navigate the complexities of business rates on unoccupied premises and ensure they are complying with their legal obligations.