If you own or manage a commercial property, you are likely familiar with business rates – the tax that businesses have to pay for using the space. However, what happens when the property is unoccupied? This is where unoccupied business rates come into play.
unoccupied business rates, also known as empty property rates, are charges levied on commercial properties that are vacant for an extended period of time. These rates were introduced as a way to incentivize property owners to either occupy or redevelop their empty spaces, rather than leaving them unused.
The concept of unoccupied business rates can be a confusing one for many property owners and managers. To help clear up any confusion, let’s take a closer look at what unoccupied business rates are, who is responsible for paying them, and how they are calculated.
One of the key things to understand about unoccupied business rates is that they apply to most commercial properties that have been empty for more than three months. This includes shops, offices, warehouses, factories, and other types of business premises.
Who is responsible for paying unoccupied business rates can vary depending on the specific circumstances. In most cases, the property owner is responsible for paying these rates. However, if the property is being rented out, the responsibility may fall to the tenant instead.
It’s important to note that there are some exceptions to when unoccupied business rates apply. For example, certain newly built properties may be exempt from these charges for a period of time. Additionally, properties that are in the process of being renovated or undergoing repairs may also be eligible for relief from unoccupied business rates.
Calculating unoccupied business rates can be a bit complex, as the amount you will have to pay can vary depending on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA), and is used to calculate how much business rates you will need to pay.
When a property becomes unoccupied, the rateable value is often reduced by 100%. However, this doesn’t necessarily mean that you won’t have to pay anything. The government has set a minimum charge for unoccupied business rates, which is currently set at 3.92% of the rateable value for properties in England.
Some property owners may try to avoid paying unoccupied business rates by temporarily occupying the space with minimal use, such as storing items or setting up a small office. However, it’s important to note that the government has guidelines in place to determine what constitutes occupation, and simply placing a few items in the space may not be enough to avoid these charges.
If you are struggling to pay unoccupied business rates, there are some options available to help alleviate the financial burden. For example, you may be eligible for certain exemptions or discounts depending on the circumstances of your property. It’s worth exploring these options to see if you can reduce or eliminate the amount you owe.
Additionally, you may be able to appeal the rateable value of your property if you believe it has been calculated incorrectly. This can be a complex process, so it’s a good idea to seek professional advice if you are considering going down this route.
In conclusion, unoccupied business rates are a factor that property owners and managers need to be aware of when it comes to managing commercial properties. Understanding who is responsible for paying these rates, how they are calculated, and what options are available for relief can help you navigate this aspect of property ownership more effectively. By staying informed and proactive, you can ensure that you are in compliance with the regulations surrounding unoccupied business rates and minimize any financial impact on your business.