Business rates can be a significant financial burden for property owners, especially when their properties sit empty and generate no income. In the UK, owners of non-residential properties are required to pay business rates on empty buildings, which can quickly add up to a hefty sum. However, there are some strategies that property owners can employ to legally avoid or reduce their business rates liability on vacant properties. In this article, we will explore some of the most effective ways to avoid business rates on empty property.
One common strategy that property owners use to avoid paying business rates on empty property is to claim an exemption. Under current UK legislation, property owners are entitled to a three-month exemption from paying business rates on newly vacant properties. This initial three-month period can provide property owners with some breathing room to find new tenants or make necessary repairs to the property. It is important to note that this exemption only applies to properties that have become vacant, so owners must notify the local council as soon as the property becomes empty to take advantage of this exemption.
Another strategy that property owners can use to reduce their business rates liability on empty property is negotiating with the local council for a reduced rate. Some local authorities offer discretionary rate relief for empty properties, especially in areas where there is a high vacancy rate. Property owners can make a case to the council for why they should receive a reduction in their business rates, such as demonstrating that they are actively seeking new tenants or investing in the property to bring it back into use. While there is no guarantee that the council will grant a reduction, it is worth exploring this option to potentially lower the financial burden of business rates on empty property.
Property owners can also consider temporarily occupying the vacant property themselves to avoid paying business rates. In some cases, if a property owner uses the property for a temporary purpose, such as hosting events or running a pop-up shop, they may be able to claim an exemption from paying business rates. This strategy can be a creative way to generate some income from the property while avoiding or reducing business rates liability. However, property owners should be aware that there are limitations on how long they can use the property for temporary purposes before they must start paying business rates again.
Another effective strategy for avoiding business rates on empty property is to consider demolishing or converting the property. In some cases, property owners may find that the cost of paying business rates on an empty building outweighs the potential income from renting or selling the property. In these situations, owners may choose to demolish the property or convert it into a different use to avoid paying business rates. By taking this approach, property owners can avoid the financial burden of business rates on empty property while potentially recouping their investment through the sale of the land or the new development.
Property owners can also consider working with a professional rating advisor to help them navigate the complex world of business rates. Rating advisors have the expertise and knowledge to help property owners understand their rights and obligations when it comes to business rates on empty property. They can provide valuable advice and guidance on strategies for avoiding or reducing business rates liability, as well as represent property owners in negotiations with the local council. By enlisting the help of a rating advisor, property owners can ensure that they are taking full advantage of all available options for minimizing their business rates liability on empty property.
In conclusion, business rates on empty property can be a significant financial burden for property owners, but there are strategies that can be employed to legally avoid or reduce this liability. From claiming exemptions and negotiating with the local council to temporarily occupying the vacant property, demolishing or converting the property, and working with a rating advisor, property owners have several options for minimizing their business rates liability on empty property. By exploring these strategies and taking proactive steps to address their business rates obligations, property owners can effectively manage the financial impact of empty property on their bottom line.