When a commercial property sits empty, it can have a significant financial impact on the business owner. One of the costs that is often overlooked is the unoccupied business rates, which are fees that are charged on properties that are not being used for business purposes. These rates can add up quickly and become a burden for the property owner. In this article, we will delve into what unoccupied business rates are, how they are calculated, and the possible exemptions that may be available.
What are unoccupied business rates?
Unoccupied business rates are a tax that is levied on commercial properties that are empty for a certain period of time. In the United Kingdom, the local government is responsible for setting the rates for unoccupied properties, which can vary depending on the location and type of property. These rates are meant to incentivize property owners to keep their buildings occupied and in use, as empty properties can have a negative impact on the surrounding area.
How are unoccupied business rates Calculated?
The calculation of unoccupied business rates is based on the rateable value of the property. The rateable value is assessed by the government and is used to determine how much tax a property owner will need to pay. The rates are typically set at a percentage of the rateable value, with the exact percentage varying depending on the local government’s policies.
For properties that have been empty for three months or more, the property owner will be required to pay 100% of the normal business rates. This can be a significant amount of money, especially for larger properties with a high rateable value. In some cases, property owners may be able to negotiate with the local government to reduce the rates, but this can be a lengthy and uncertain process.
Possible Exemptions for unoccupied business rates
There are some exemptions available for unoccupied business rates, which can help property owners reduce the financial burden of having an empty property. One common exemption is for properties that are undergoing major renovations or repairs. In these cases, the property owner may be able to apply for a temporary exemption from the rates until the work is completed and the property is back in use.
Another exemption is for properties that are considered to be too dangerous to occupy. This can apply to buildings that are in a state of disrepair or pose a health and safety risk to occupants. Property owners will need to provide evidence to the local government to support their claim for exemption, which may include reports from structural engineers or building inspectors.
It is important for property owners to be aware of the exemptions that may be available to them, as they can help reduce the financial impact of unoccupied business rates. However, it is also crucial to keep in mind that each local government may have different policies and criteria for granting exemptions, so it is best to consult with a professional advisor or the local government directly for accurate information.
In conclusion, unoccupied business rates can be a significant financial burden for property owners, especially for those with large or high-value properties. It is important for property owners to be aware of the rates that apply to their properties and to explore all possible exemptions that may be available to them. By staying informed and proactive, property owners can mitigate the impact of unoccupied business rates and ensure that their properties remain financially sustainable.