When it comes to running a business, there are numerous costs and expenses that business owners need to consider. One of these costs is business rates, which are taxes paid on non-domestic properties to help fund local services. However, what happens when a business premises is left unoccupied? Do business rates still need to be paid on these properties? In this article, we will explore the topic of business rates on unoccupied premises, also known as “business rates on unoccupied premises.”
Business rates are a tax that businesses in the UK need to pay on non-domestic properties such as shops, offices, and warehouses. The rates are collected by local authorities and are used to fund local services such as schools, roads, and bin collections. The amount of business rates that a business needs to pay is based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA).
When a business premises is left unoccupied, business rates still need to be paid on the property. This is because the property is still considered to be benefiting from local services such as policing and street cleaning, even if it is not being actively used. The only exception to this rule is if the property is deemed to be exempt from business rates, such as buildings that are used for certain charitable purposes.
Business rates on unoccupied premises can be a significant financial burden for businesses, especially during times of economic uncertainty. In response to this, the government has introduced some measures to help businesses manage their business rates liability on unoccupied properties. For example, in England, businesses are entitled to a three-month exemption from business rates when a property becomes empty. This exemption can be extended to six months for industrial properties such as warehouses, and for certain other types of properties.
After the initial three or six-month exemption period has ended, businesses are then required to pay full business rates on unoccupied premises. This can be a challenge for businesses that are struggling financially or are unable to find new tenants for their properties. However, there are some options available to businesses to help reduce their business rates liability on unoccupied premises.
One option for businesses is to apply for a business rates relief or discount. There are various types of relief available to businesses, depending on the circumstances of the property. For example, businesses may be eligible for a 100% relief on their business rates if the property is unoccupied and undergoing major repair works. Alternatively, businesses may be entitled to a 50% discount on their business rates if the property has been unoccupied for more than three months but less than six months.
Another option for businesses is to apply for business rates mitigation, also known as business rates mitigation schemes. These schemes are designed to help businesses reduce their business rates liability on unoccupied premises by negotiating with the local authority. Businesses can work with a specialist rates mitigation company to negotiate a reduction in their business rates bill, based on factors such as the condition of the property and market conditions.
It is important for businesses to be aware of their obligations when it comes to business rates on unoccupied premises. Failure to pay business rates on unoccupied properties can result in legal action being taken against the business, including court proceedings and the seizure of assets. It is therefore essential for businesses to seek professional advice and explore all available options to help reduce their business rates liability on unoccupied premises.
In conclusion, business rates on unoccupied premises can be a significant financial burden for businesses, especially during times of economic uncertainty. However, there are measures in place to help businesses manage their business rates liability on unoccupied properties, such as exemptions, reliefs, and mitigation schemes. It is important for businesses to be aware of their obligations and explore all available options to help reduce their business rates liability on unoccupied premises. By seeking professional advice and taking proactive steps, businesses can effectively manage their business rates on unoccupied premises and protect their financial interests.