Business rates are a tax on non-domestic properties such as shops, offices, and factories. One of the most confusing aspects of business rates for many property owners is how they are charged on unoccupied premises. In this article, we will explore the ins and outs of business rates on unoccupied premises and what property owners need to know to avoid unnecessary financial burden.
Unoccupied properties are subject to business rates just like occupied properties, with some key differences. The main difference is that while occupied properties are charged based on the property’s rateable value, unoccupied properties are subject to a different set of rules. The rules regarding the charges on unoccupied properties vary depending on the circumstances, but understanding them can help property owners save money and avoid penalties.
One common misconception is that unoccupied properties are exempt from business rates. While some properties can qualify for exemptions or discounts, they are not automatically exempt from paying business rates. For example, newly built properties are exempt from business rates for the first three months after completion, and industrial properties are exempt for the first six months. After these periods, business rates are payable on unoccupied properties unless specific exemptions apply.
Another key point to consider is that the government introduced legislation which allows local councils to charge higher business rates on properties that have been empty for an extended period. This is known as the empty property rate, and it is set at 100% of the normal business rates after the property has been empty for a specified length of time, typically three months. This can result in substantial financial costs for property owners, making it crucial to understand the rules and regulations surrounding unoccupied premises.
One way to avoid paying full business rates on unoccupied premises is to actively work towards bringing the property back into use. In some cases, if property owners can show that they are actively trying to find tenants or buyers for the property, they may qualify for an exemption or a discount on the business rates. This can be a good incentive for property owners to take steps to fill their empty properties and avoid the financial burden of full business rates.
Property owners can also consider negotiating with their local council to come to an agreement on the business rates for unoccupied premises. Some councils may be willing to offer discounts or payment plans to help property owners manage the costs of empty properties. It is worth exploring this option to find a solution that works for both parties and avoids unnecessary financial strain.
It is essential for property owners to stay informed about changes in business rates regulations and seek professional advice if needed. The rules surrounding business rates on unoccupied premises can be complex, and it is crucial to understand how they apply to specific situations to avoid penalties or overpayment. Property owners can consult with a qualified surveyor or accountant to get advice on how to navigate the rules and regulations surrounding unoccupied premises.
In conclusion, business rates on unoccupied premises are a common concern for property owners, but with the right knowledge and strategies, they can be managed effectively. Understanding the rules and regulations surrounding unoccupied properties, actively working towards bringing properties back into use, and seeking professional advice when needed are all crucial steps to avoid unnecessary financial burden. By staying informed and proactive, property owners can navigate the complexities of business rates on unoccupied premises and ensure they are not paying more than necessary.