When it comes to owning property for business use, one of the biggest concerns for owners is the burden of business rates. These rates can eat into profits and become a significant expense, especially for properties that are left empty for long periods of time. In the UK, business rates are charged on most non-domestic properties, including shops, offices, factories, and warehouses. However, there are ways to avoid paying business rates on empty property, here’s how.
One of the most effective ways to avoid business rates on empty property is to utilize the empty property relief scheme. This scheme allows owners of empty non-domestic properties to claim relief on their business rates for a certain period of time. In England, for example, most non-domestic properties are eligible for 100% relief for the first three months they are empty. After the initial three month period, the property owner can apply for a further three months of relief if the property remains empty. This relief can be extended for up to 12 months in total, depending on the property’s rateable value.
Another way to avoid business rates on empty property is to consider demolishing or renovating the property. Properties undergoing renovation or structural changes are exempt from business rates for a period of 12 months. This can provide property owners with the time and opportunity to improve the property and potentially attract new tenants. Similarly, if a property is demolished and no longer exists, owners can apply for relief on their business rates. However, it is important to note that any relief granted on empty property will be canceled if the property is reoccupied or put back into use.
Owners of empty properties can also consider letting the property for temporary or short term use. Properties that are occupied for a short time are exempt from business rates for that period. This can be a great way to generate income from an otherwise empty property and avoid paying business rates. Owners can explore options such as pop-up shops, temporary offices, or events spaces to make use of the property and benefit from relief on business rates.
Additionally, property owners can consider applying for hardship relief if they are facing financial difficulties that prevent them from paying business rates on empty property. This relief is granted on a case-by-case basis and takes into consideration the financial circumstances of the property owner. Owners must provide evidence of their financial situation and demonstrate that paying business rates would cause them undue hardship.
It is important for property owners to stay informed about changes in legislation and any updates to business rates relief schemes. Local councils have the authority to make changes to relief schemes and may offer additional support to property owners during specific times, such as economic downturns or crises. By staying aware of these changes, property owners can take advantage of new relief opportunities and ensure they are not overpaying on business rates for empty property.
In conclusion, avoiding business rates on empty property is possible with careful planning and consideration of available relief schemes. By utilizing empty property relief, renovating or demolishing properties, letting for temporary use, and applying for hardship relief when necessary, property owners can minimize the financial burden of business rates. Staying informed about changes in legislation and relief schemes is key to maximizing returns on empty property and ensuring that owners are not paying more than necessary. With the right strategies in place, property owners can effectively manage their business rates and make the most of their investments.