As a business owner, you are likely well aware of the numerous costs and expenses that come with running a company. From rent and utilities to payroll and supplies, the list can seem never-ending. One expense that may not be on your radar, however, is void business rates.
Void business rates, also known as empty property rates, can catch many business owners off guard if they are not familiar with them. These rates are charged on commercial properties that are empty for a certain period of time, typically three months or more. The idea behind void business rates is to discourage property owners from leaving their properties vacant and to incentivize them to put them back into use.
It is important for business owners to be aware of void business rates, as they can add significant costs to your bottom line if you are not prepared. In this article, we will explore what void business rates are, how they are calculated, and what you can do to minimize their impact on your business.
What Are void business rates?
Void business rates are a tax that is levied on commercial properties that are empty and unused for an extended period of time. The rates are calculated based on the rateable value of the property, which is typically determined by the rental value of the property. In England and Wales, void business rates are set at a rate of 50% of the full business rates bill for the first three months that a property is empty. After three months, the rate increases to the full amount.
It is important to note that different rules and regulations may apply in Scotland and Northern Ireland, so be sure to check with your local council or government agency for specific information on void business rates in your area.
How Are void business rates Calculated?
Calculating void business rates can be a complex process, as it involves determining the rateable value of the property, applying the appropriate tax rate, and accounting for any exemptions or reliefs that may apply. The rateable value of a property is typically determined by local government assessors, who take into account factors such as the size, location, and condition of the property.
Once the rateable value has been established, the void business rates are calculated based on the current tax rate for empty properties in your area. As mentioned earlier, the rates are typically set at 50% of the full business rates bill for the first three months, and then increase to the full amount after that time period.
Exemptions and Relief
While void business rates can be a significant expense for property owners, there are some exemptions and reliefs available that can help to reduce or eliminate the tax altogether. For example, properties that are undergoing major structural repairs or refurbishments may be eligible for relief from void business rates. Additionally, properties that are listed buildings or are considered to have special historical or architectural significance may also qualify for exemptions.
It is important to note that these exemptions and reliefs vary depending on the specific circumstances of the property and the local regulations that apply. Be sure to consult with your local council or a qualified tax professional to determine what options may be available to you.
Minimizing the Impact of void business rates
While void business rates can be a costly expense for property owners, there are some steps you can take to minimize their impact on your business. One option is to actively market your property for lease or sale to attract potential tenants or buyers. By proactively seeking to fill the property, you can reduce the amount of time that it remains empty and, in turn, lower your void business rates liability.
Another option is to explore alternative uses for the property during periods of vacancy. For example, you may be able to rent out the space for temporary events or pop-up shops, or use it for storage or other purposes that generate income. By keeping the property occupied, even temporarily, you can help to offset the cost of void business rates.
In conclusion, void business rates are an important consideration for business owners who own or lease commercial properties. By understanding what void business rates are, how they are calculated, and what options are available to minimize their impact, you can better navigate this aspect of property ownership and management. Be sure to stay informed and proactive in managing your property to avoid unexpected expenses and maximize the value of your investment.