Void business rates, also known as empty property rates, are an often overlooked aspect of the business world. These rates can have a significant impact on companies that own commercial properties, especially when those properties are vacant for an extended period. In this article, we will explore what void business rates are, how they are calculated, and what steps businesses can take to minimize their impact.
What are void business rates?
Void business rates are taxes that are levied on commercial properties that are empty or unoccupied for an extended period. These rates are charged by local authorities in the UK and are intended to help fund local services. The idea behind void business rates is to encourage property owners to keep their buildings occupied and to prevent the blight of empty storefronts in towns and cities.
How are void business rates Calculated?
The calculation of void business rates can vary depending on the location and type of property. In England, for example, empty commercial properties are subject to business rates at a rate of 50% of the normal rate after they have been empty for three months. After the property has been empty for six months, the rate goes up to 100% of the normal rate. In Scotland, on the other hand, commercial properties are exempt from business rates for the first three months they are empty, but then the full rate applies thereafter.
It’s important for businesses to be aware of these rates and how they are calculated, as they can represent a significant additional cost, especially for companies that own multiple properties. For some businesses, void business rates can be a financial burden that affects their bottom line and ability to invest in other areas of their operations.
Minimizing the Impact of void business rates
There are several steps that businesses can take to minimize the impact of void business rates on their operations. One of the most effective ways to reduce the amount of void business rates that you have to pay is to keep your properties occupied. This may seem like an obvious solution, but it can be challenging in today’s competitive business environment.
If you do have empty properties, there are still ways to reduce the amount of void business rates you have to pay. For example, if you are carrying out repairs or renovations on a property, you can apply for an exemption from void business rates for a limited period. This can help to alleviate some of the financial pressure on your business while you work to get the property back on the market.
Another option for businesses facing void business rates is to consider leasing out empty properties on a short-term basis. This can help to generate some income from the property and reduce the amount of void business rates that you have to pay. Short-term leases can be a win-win for both the property owner and the tenant, as they provide a temporary solution for the property owner while also giving the tenant a space to operate their business.
Finally, businesses can also consider applying for relief from void business rates if they are unable to find a tenant for their property. Local authorities have the discretion to grant relief in certain circumstances, such as if the property is in poor condition or if it is in a disadvantaged area. It’s worth exploring all of your options for relief from void business rates, as this can help to alleviate some of the financial pressure on your business.
In conclusion, void business rates are an important consideration for businesses that own commercial properties. These rates can represent a significant additional cost and can have a real impact on a company’s bottom line. By understanding how void business rates are calculated and exploring options for relief, businesses can take steps to minimize the financial impact of these rates on their operations. Ultimately, staying informed and proactive is key to managing void business rates effectively.