Business rates can be a significant financial burden for property owners, especially when the property is empty. In the United Kingdom, owners of commercial properties are required to pay business rates even if their property is not in use. However, there are ways to legally avoid paying business rates on empty property. In this article, we will explore some of the strategies that property owners can use to minimize their business rates liability.
One common way to avoid paying business rates on empty property is to apply for an exemption. In the UK, certain types of properties are exempt from business rates, including agricultural land and buildings, buildings used for welfare or training, and some listed buildings. Property owners can also apply for temporary exemptions if the property is undergoing repair or redevelopment, or if it is waiting to be occupied.
Another strategy for avoiding business rates on empty property is to temporarily occupy the property with a minimal amount of furniture or equipment. In the UK, if a property is occupied for a short period of time with minimal furnishings, it may qualify for a temporary exemption from business rates. This strategy can be especially useful for property owners who are struggling to find a long-term tenant for their property.
Property owners can also explore the option of leasing their empty property to a charity or community interest company (CIC). In the UK, properties occupied by charities or CICs are eligible for an 80% discount on business rates. By leasing their property to a qualifying organization, property owners can significantly reduce their business rates liability while also contributing to a good cause.
Alternatively, property owners can consider applying for business rates relief under the empty property relief scheme. This scheme allows property owners to claim a 100% discount on business rates for a specified period of time, typically up to three months. After this initial period, the property owner may still be eligible for a 50% discount on business rates for an additional period of time, depending on the circumstances.
It is important for property owners to keep in mind that there are strict rules and regulations governing business rates relief and exemptions. Property owners should carefully review the eligibility criteria for each relief scheme and ensure that they meet all the requirements before applying. Failure to comply with the rules could result in penalties or fines, so it is essential to seek professional advice to avoid any potential pitfalls.
In some cases, property owners may also be able to negotiate with the local council to reduce their business rates liability on empty property. Councils have the discretion to offer discretionary relief in certain circumstances, such as when a property is unable to generate any income due to factors beyond the owner’s control. Property owners should be prepared to provide evidence to support their case and may need to engage in negotiations with the council to reach a satisfactory resolution.
Finally, property owners can explore alternative uses for their empty property to generate income and reduce their business rates liability. For example, a vacant commercial property could be repurposed as a temporary event space, a pop-up shop, or a storage facility. By diversifying the use of their property, owners can minimize their business rates liability while also potentially attracting new tenants in the future.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property. By exploring exemptions, temporary occupancy, leasing to charities, applying for relief schemes, negotiating with the local council, and exploring alternative uses, property owners can minimize their business rates liability and make the most of their empty property. It is crucial for property owners to stay informed about the rules and regulations governing business rates and seek professional advice when necessary to ensure compliance and avoid any potential penalties.