Empty commercial property can be a burden for many businesses, especially when it comes to paying business rates. Business rates are a tax on non-residential properties that helps fund local services such as road maintenance, police, and fire departments. However, what happens when a property is empty and not generating any revenue? This is where void business rates come into play.
void business rates are rates that are payable on empty commercial properties. In the UK, business rates are a significant cost for businesses, and when a property is empty, it can be a financial strain to continue paying these rates. However, void business rates are still charged on empty properties, and they can be a significant financial burden for property owners.
The purpose of void business rates is to discourage property owners from leaving their properties empty for long periods. The idea is that by charging rates on empty properties, property owners will be encouraged to find tenants or buyers more quickly. However, for many property owners, void business rates can be a huge financial strain, especially if they are struggling to find tenants or buyers for their properties.
void business rates are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate how much a property should pay in business rates. The rateable value is re-assessed every five years, and the amount of void business rates that a property owner must pay is based on this value.
There are some exemptions for void business rates. For example, if a property is being refurbished or undergoing structural alterations, the property owner may be able to apply for an exemption from void business rates. This exemption is only temporary and will usually only last for three months.
Another exemption is if a property falls below a certain rateable value threshold. In England, properties with a rateable value of £2,900 or less are exempt from paying business rates, even if they are empty. This threshold is higher in other parts of the UK, such as Wales and Scotland.
Property owners can also apply for other forms of relief from void business rates. For example, if a property is charitable or used for certain purposes, the property owner may be able to receive relief from void business rates. However, these reliefs are subject to certain criteria and may not be available to all property owners.
Property owners must also be aware of the consequences of not paying void business rates. If a property owner fails to pay void business rates, they may be subject to fines or legal action. This can result in additional financial penalties and may even lead to the property being seized by the local authorities.
In recent years, there has been some controversy surrounding void business rates. Many property owners argue that void business rates are unfair, especially for small businesses that are struggling to find tenants or buyers for their properties. Some property owners have called for a reform of the business rates system to make it fairer for businesses facing financial difficulties.
Overall, void business rates can be a significant financial burden for property owners. It is important for property owners to be aware of their obligations when it comes to paying void business rates and to explore any exemptions or reliefs that may be available to them. By understanding void business rates and planning accordingly, property owners can navigate the challenges of empty properties more effectively.