Business rates are a necessary expense for any business operating in the UK However, when a property is left vacant, business owners may be surprised to learn that they are still liable to pay business rates on the property These rates, also known as national non-domestic rates (NNDR), are charged on most non-residential properties, including shops, offices, factories, and warehouses In this article, we will explore why business rates are still required for vacant property, how they are calculated, and what business owners can do to reduce their liability.
One of the main reasons why business rates are still applicable to vacant properties is to discourage property owners from leaving their properties empty This is because empty buildings can have a negative impact on the local community, leading to decreased foot traffic and a decline in property values By charging business rates on vacant properties, the government aims to incentivize property owners to either occupy or sell their properties, thus stimulating economic growth and revitalizing the area.
Business rates for vacant property are typically calculated based on the rateable value of the property The rateable value is determined by the Valuation Office Agency (VOA) and represents the property’s open market rental value as of a specific date The rateable value is then multiplied by the current multiplier set by the government to calculate the business rates payable on the property It is important to note that different properties may have different rateable values and multipliers, so business owners should check with the VOA to determine their specific liabilities.
Business owners who own vacant property may be wondering how they can reduce their business rates liability There are several options available for property owners looking to minimize their rates, including:
1 Small business rate relief: If the rateable value of the property is below a certain threshold, property owners may be eligible for small business rate relief This relief can significantly reduce the amount of business rates payable on the property, providing much-needed financial relief to small business owners.
2 business rates vacant property. Empty property rate relief: Property owners may be eligible for empty property rate relief if their property has been vacant for an extended period This relief can provide a temporary exemption from business rates for up to three months for most non-industrial properties and up to six months for industrial properties However, it is important to note that once the relief period ends, business rates will be payable at the full rate.
3 Charity rate relief: Charitable organizations that own vacant property may be eligible for charity rate relief, which can reduce their business rates liability To qualify for this relief, the property must be used for charitable purposes or be available for charitable use within six months of becoming vacant.
4 Appeal the rateable value: Property owners who believe that the rateable value assigned to their property is inaccurate can appeal to the VOA to have it reassessed If successful, this can result in a lower rateable value and a reduction in business rates payable on the property.
It is important for business owners to be aware of their business rates liabilities, even when their property is vacant Failure to pay business rates on a vacant property can result in legal action, fines, and even seizure of the property Therefore, it is crucial for property owners to stay informed about their obligations and explore all available options for reducing their business rates liability.
In conclusion, business rates for vacant property are a necessary expense that property owners must be prepared to address By understanding why business rates are still applicable to vacant properties, how they are calculated, and what options are available for reducing rates, property owners can take proactive steps to minimize their liability and avoid potential penalties While paying business rates on vacant property may seem burdensome, it is an important contribution to the local community and helps to maintain the overall health of the economy.