When it comes to running a business, there are numerous expenses that owners must consider. From payroll and utilities to marketing and rent, the costs can quickly add up. One expense that many business owners may not be familiar with is void business rates.
Void business rates, also known as empty property rates, are a tax that owners of commercial buildings must pay when their property is unoccupied. These rates are imposed by local councils and are designed to discourage property owners from leaving their buildings empty for extended periods.
Understanding void business rates and how they work is essential for any business owner, especially those who own commercial property. In this article, we will delve into the details of void business rates and provide valuable information to help you navigate this aspect of running a business.
The Basics of void business rates
Void business rates are a tax that must be paid on commercial properties that are empty for an extended period. The rates are charged at the same rate as the normal business rates that would apply if the property were occupied. However, some properties may be entitled to a discount on void business rates, such as those undergoing refurbishment or repair.
It is important to note that void business rates apply to both freehold and leasehold commercial properties. If you are the owner of a commercial property and it becomes empty, you will be liable to pay void business rates unless you meet certain exceptions.
Exceptions to void business rates
There are several circumstances in which a property owner may be exempt from paying void business rates. These exemptions include:
1. Newly constructed properties: If your property is newly constructed and has not yet been occupied, you may be entitled to a full exemption from void business rates for a certain period. This exemption varies depending on the location and type of property.
2. Listed buildings: Properties that are listed as historic buildings may be exempt from void business rates. However, this exemption is not automatic and must be applied for with the local council.
3. Small business rate relief: If your property qualifies for small business rate relief, you may be eligible for a discount on void business rates. This relief is available to properties with a rateable value below a certain threshold.
4. Industrial properties: Industrial properties that are not in use may be eligible for a full exemption from void business rates. However, this exemption may only apply for a limited period.
It is essential to check with your local council to determine if your property qualifies for any exemptions from void business rates. Failing to pay void business rates when they are due can result in hefty fines and legal implications.
Managing void business rates
For property owners who find themselves liable for void business rates, there are several strategies that can help manage this expense. One common approach is to actively market the property for rent or sale to minimize the time it remains empty. By finding a tenant or buyer quickly, you can reduce the period for which void business rates apply.
Another option is to consider negotiating with the local council for a reduction or waiver of void business rates. This may be possible in certain circumstances, such as if the property is undergoing renovation or if you can demonstrate that efforts are being made to bring the property back into use.
In some cases, property owners may choose to explore alternative uses for their empty commercial properties to generate income and avoid paying void business rates. For example, converting a vacant office building into residential units or a coworking space may provide a new revenue stream while the property is unoccupied.
Conclusion
Void business rates are an important consideration for any business owner who owns commercial property. Understanding how void business rates work, the exemptions that may apply, and strategies for managing this expense can help minimize the financial impact of empty properties.
By staying informed and proactive, property owners can navigate void business rates effectively and mitigate the costs associated with unoccupied buildings. Whether you are a landlord, investor, or business owner, being aware of void business rates is essential for successful property management and business operations.