If you’re a business owner or landlord, you may have come across the term “void business rates” at some point. Understanding what void business rates entail is important for managing your finances and avoiding any surprises down the line.
void business rates refer to the business rates that are payable on a commercial property that is empty or unoccupied. In other words, if your business premises are vacant for a certain period of time, you may still be liable to pay business rates on that property. This can come as a shock to some business owners who may assume that they are exempt from paying rates on empty properties.
The rules and regulations surrounding void business rates can be complex and vary depending on the location of your property. In England, for example, properties that have been empty for three months or more are usually subject to void business rates. However, there are some exemptions and discounts available that may apply in certain circumstances.
It’s important to note that void business rates are separate from other types of rates that you may be required to pay, such as non-domestic rates. Non-domestic rates are charged on most non-domestic properties, including commercial properties, and are based on the rateable value of the property. void business rates, on the other hand, are specifically related to the occupation status of the property.
One common misconception is that business owners or landlords can avoid paying void business rates simply by keeping their properties unoccupied. However, this is not always the case. Local authorities have the authority to charge void business rates on properties that they deem to be deliberately left vacant to avoid paying rates. This is known as “phoenixing” and is seen as an abuse of the system.
There are a few exceptions to the void business rates rule. For example, newly built properties are usually exempt from paying void business rates for the first three months after completion. This is to give businesses some time to set up before they are hit with additional costs. Additionally, listed buildings and properties with a rateable value of less than £2,900 are also exempt from void business rates.
If you find yourself liable to pay void business rates on a property, there are a few options available to you. One common strategy is to apply for an exemption or relief from the local council. There are several types of relief that may be available, such as the small business rate relief or the empty property rate relief. These schemes can significantly reduce the amount of void business rates that you are required to pay.
Another option is to actively market your property for rent or sale. If you can demonstrate to the local authority that you are making efforts to occupy the property, they may be willing to grant you relief on the void business rates. This shows that you are not deliberately keeping the property vacant and are actively seeking to put it to use.
It’s also worth considering the long-term implications of paying void business rates. While it may be tempting to leave a property vacant in the short term to avoid additional costs, doing so could harm your business in the long run. Vacant properties can attract vandalism, squatting, and other issues that can damage the property and reduce its value. It may be more cost-effective in the long run to rent out the property and avoid paying void business rates altogether.
In conclusion, void business rates can be a significant cost for business owners and landlords, especially if they are unaware of the rules and regulations surrounding them. Understanding how void business rates work and taking proactive steps to manage them can help you avoid any surprises and save money in the long run. If you find yourself liable for void business rates, be sure to explore all available options for relief and consider the potential consequences of leaving your property vacant.