As a business owner or property manager, one of the costs that you may encounter is vacant business rates. These rates are charged on properties that are empty or not in use, and they can have a significant impact on your overall expenses. In this article, we will explore vacant business rates in more detail, including what they are, how they are calculated, and what you can do to mitigate their impact on your bottom line.
What are vacant business rates?
vacant business rates are a form of tax that is levied on properties that are empty and not being used for business purposes. These rates are charged by local authorities in the UK and are intended to encourage property owners to bring their empty properties back into use. vacant business rates are in addition to regular business rates that are charged on properties that are occupied and in use.
How are vacant business rates calculated?
The calculation of vacant business rates is based on the rateable value of the property in question. The rateable value is an estimate of the annual rental value of the property, as determined by the Valuation Office Agency. The amount of vacant business rates that you will be required to pay is typically around 50% of the standard business rates for the property. However, there are some exceptions and exemptions that may apply, depending on the specific circumstances of the property.
It is important to note that vacant business rates are only charged on properties that have been empty for a certain period of time. The exact period of time before vacant business rates are applied can vary depending on the local authority, but it is typically around three months for commercial properties.
What can you do to mitigate the impact of vacant business rates?
There are several steps that you can take to reduce or eliminate the impact of vacant business rates on your business. One option is to appeal the rateable value of the property with the Valuation Office Agency. If you believe that the rateable value has been set too high, you may be able to have it reassessed, which could result in a lower vacant business rate bill.
Another option is to consider renting out the property on a short-term basis while you search for a long-term tenant. By generating some income from the property, you may be able to offset some of the costs of the vacant business rates. Additionally, renting out the property on a short-term basis can help to deter vandalism and other issues that can arise when a property is left empty for an extended period of time.
If you are unable to find a tenant for the property, you may want to consider other ways to use the space that do not incur vacant business rates. For example, you could explore the possibility of using the property for storage or as a pop-up shop or event space. By finding alternative uses for the property, you may be able to avoid or reduce the vacant business rates that you are required to pay.
In some cases, you may be eligible for an exemption from vacant business rates. For example, properties that are undergoing major redevelopment or refurbishment may be exempt from vacant business rates for a certain period of time. Additionally, properties that are listed buildings or are located in designated enterprise zones may also be exempt from vacant business rates. It is worth checking with your local authority to see if any exemptions apply to your property.
In conclusion, vacant business rates can be a significant expense for property owners, but there are steps that you can take to mitigate their impact. By appealing the rateable value of the property, renting out the property on a short-term basis, exploring alternative uses for the property, or seeking exemptions, you may be able to reduce or eliminate the vacant business rates that you are required to pay. It is important to carefully consider your options and seek advice from a professional if you are unsure about how to proceed.