When it comes to running a business, there are many expenses that owners must account for. One of these expenses is business rates, which are taxes paid on commercial property. However, there is a provision called the business rates empty property exemption that can provide relief for businesses that have vacant properties.
Business rates are a tax levied by local authorities in the UK on most non-domestic properties. This includes shops, offices, warehouses, and factories. The rates are used to fund local services such as schools, police, and fire departments. The amount of business rates that a property owner must pay is calculated based on the rateable value of the property, which is determined by the Valuation Office Agency.
In some cases, businesses may find themselves with vacant properties due to various reasons such as relocation, downsizing, or simply not finding a tenant. Paying business rates on these empty properties can be a significant financial burden for business owners. This is where the business rates empty property exemption comes into play.
The business rates empty property exemption allows property owners to claim relief on their business rates for a certain period if their property is vacant. The length of the exemption period varies depending on the type of property and the circumstances surrounding its vacancy. For example, industrial properties can receive a 100% exemption for the first three months of vacancy, followed by a 50% exemption for the next three months. After six months, the property will be subject to the full business rates unless further exemptions are granted.
It is important for property owners to be aware of the rules and regulations surrounding the business rates empty property exemption to ensure they are not paying more than necessary. Failure to apply for the exemption or to comply with the rules can result in penalties and fines from the local authorities.
There are certain conditions that must be met in order to qualify for the business rates empty property exemption. The property must be genuinely vacant, meaning it is not being used for any business purposes. It must also be capable of being occupied, in a state of reasonable repair, and not undergoing any structural alterations. Property owners must provide evidence to support their claim for the exemption, such as utility bills, insurance documents, or proof of marketing efforts to find a tenant.
Property owners should also be aware of changes to the business rates empty property exemption that were introduced in April 2017. Previously, properties with a rateable value of less than £2,900 were completely exempt from business rates. However, the threshold was increased to £12,000, meaning more properties are now subject to business rates even if they are vacant.
One way for property owners to mitigate the impact of business rates on their vacant properties is to explore other relief schemes that may be available to them. For example, there is a scheme called the Small Business Rate Relief (SBRR) that provides relief for properties with a rateable value below a certain threshold. Property owners may also be eligible for other exemptions and discounts depending on their circumstances.
Overall, the business rates empty property exemption is a valuable provision that can help businesses save money on their taxes when they have vacant properties. By understanding the rules and regulations surrounding the exemption and ensuring they meet the necessary conditions, property owners can benefit from this relief scheme and avoid unnecessary financial burden. It is important for businesses to stay informed about changes to the exemption and explore other relief options to effectively manage their business rates.