If you are a business owner or manager, you are likely familiar with the concept of business rates – the taxes levied on non-domestic properties in the UK to help fund local services. However, you may not be as familiar with the term “void business rates,” which refers to the rates charged on empty commercial properties. In this article, we will explore what void business rates are, how they are calculated, and what you can do to mitigate their impact on your business.
When a commercial property becomes vacant, the owner is still required to pay business rates on the property. These rates are known as void business rates, and they are charged at the full rateable value of the property. This can be a significant financial burden for businesses that are already struggling with the costs of maintaining an empty property.
void business rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is essentially an estimate of the annual rental value of the property, and it is used as the basis for calculating business rates. For vacant properties, the rateable value is still used to calculate void business rates, even though the property is not generating any rental income.
The government introduced void business rates to discourage property owners from leaving their properties empty for extended periods of time. The idea is that by charging business rates on empty properties, owners will be incentivised to either rent out the property or sell it to someone who can make use of it. However, this can be challenging for businesses that are unable to find a tenant or buyer for their property, especially in a tough economic climate.
There are a few exemptions and reliefs available to businesses that are struggling to pay void business rates. For example, if a property is empty for less than three months, the owner is not required to pay void business rates for that period. This is known as the empty property relief, and it can provide some temporary relief for businesses that are in the process of finding a new tenant or buyer for their property.
There is also a relief available for newly built commercial properties, which are exempt from void business rates for the first 18 months after they are completed. This can be a significant help for businesses that have invested in new developments but have not yet been able to secure tenants for their properties.
In addition to these reliefs, there are also exemptions available for certain types of properties, such as listed buildings or properties with a rateable value below a certain threshold. These exemptions can provide some relief for businesses that are struggling to pay void business rates on their properties.
If you are a business owner or manager who is struggling to pay void business rates, there are a few steps you can take to mitigate the impact on your business. One option is to try to negotiate a lower rateable value for your property with the VOA. This can be a complex and time-consuming process, but it can result in a significant reduction in your void business rates.
Another option is to explore alternative uses for your property while it is vacant. For example, you could consider renting out the property for short-term or temporary uses, such as pop-up shops or events. This can help to generate some income from the property and reduce the financial burden of paying void business rates.
Finally, if you are unable to find a tenant or buyer for your property, you may need to consider selling it. While this can be a difficult decision to make, selling the property can help to alleviate the financial strain of paying void business rates and allow you to move on to new opportunities.
In conclusion, void business rates can be a significant financial burden for businesses that are struggling to find tenants or buyers for their properties. However, there are reliefs and exemptions available that can help to mitigate the impact of void business rates on your business. By exploring these options and considering alternative uses for your property, you can work towards reducing the financial strain of void business rates and moving forward with your business goals.