Business rates can be a significant cost for property owners, especially when a property is sitting empty. However, there are ways to legally avoid paying business rates on an empty property. By understanding the regulations surrounding empty properties and taking proactive steps, you can potentially save a substantial amount of money. Here are some tips for avoiding business rates on empty property.
1. Understand the Regulations
The first step in avoiding business rates on an empty property is to understand the regulations governing empty properties. In most cases, business rates are payable on empty commercial properties after a certain period of time. However, there are exemptions and reliefs available that can help reduce or even eliminate the business rates liability.
For instance, properties with a rateable value of less than £2,900 are exempt from business rates altogether, regardless of whether they are occupied or empty. Additionally, properties that are empty due to being in need of repair or undergoing structural changes may qualify for relief from business rates. It is important to familiarize yourself with the specific regulations that apply to your property to determine if you are eligible for any exemptions or reliefs.
2. Keep the Property Occupied
One of the most effective ways to avoid paying business rates on an empty property is to keep it occupied, even if only temporarily. By finding a short-term tenant or using the property for temporary purposes such as pop-up shops or events, you can reset the clock on the empty property regulations.
In some cases, properties that are temporarily occupied may be eligible for exemptions or relief from business rates. Additionally, generating income from the property can help offset the costs of business rates and maintenance, making it a more cost-effective option than leaving the property empty.
3. Consider Temporary Use Class Orders
In response to the COVID-19 pandemic, the government introduced Temporary Use Class Orders that allow for temporary changes of use to be made to commercial properties without the need for planning permission. By taking advantage of these orders, property owners can temporarily change the use of their empty properties to activities such as retail, leisure, or community uses, which may qualify for relief from business rates.
Temporary Use Class Orders are a flexible and cost-effective way to keep empty properties occupied and generate income while also potentially reducing the business rates liability. Property owners should consult with their local planning authority to determine if their property is eligible for a temporary change of use under these orders.
4. Appeal the Rateable Value
If you believe that the rateable value of your property is incorrect or unfair, you have the right to appeal the valuation to the Valuation Office Agency (VOA). By providing evidence of comparable rents or property values in the area, you may be able to have the rateable value of your property reduced, resulting in lower business rates liability.
It is important to note that appealing the rateable value of a property can be a complex and time-consuming process, so it is advisable to seek professional advice from a chartered surveyor or property consultant. However, if successful, appealing the rateable value can result in significant savings on business rates for an empty property.
5. Explore Empty Property Relief Schemes
In some cases, local authorities offer empty property relief schemes that provide financial incentives for property owners to bring empty properties back into use. These schemes may include grants, loans, or tax incentives to encourage property owners to refurbish empty properties and attract tenants.
By participating in an empty property relief scheme, property owners can not only reduce their business rates liability but also benefit from financial support to make necessary improvements to the property. Property owners should check with their local authority to see if any empty property relief schemes are available in their area.
In conclusion, avoiding business rates on empty property is a challenging but achievable goal for property owners. By understanding the regulations surrounding empty properties, keeping the property occupied, considering temporary use class orders, appealing the rateable value, and exploring empty property relief schemes, property owners can potentially save a significant amount of money on business rates. With careful planning and proactive measures, property owners can maximize the value of their empty properties while minimizing their financial burden.