When it comes to owning commercial property, one of the key considerations for property owners is the issue of business rates on empty property. Business rates are taxes paid on non-residential properties such as shops, offices, and warehouses. These rates are set by the government and local authorities and are a significant expense for property owners. However, when a commercial property sits empty, property owners may wonder if they are still required to pay business rates on the vacant property.
The short answer to this question is yes, property owners are still required to pay business rates on empty property. This is because business rates are based on the rateable value of a property, which is an estimate of the property’s open market rental value at a certain date. The rateable value is set by the Valuation Office Agency (VOA), which is an executive agency of HM Revenue & Customs. Even if a property is vacant, it still has a rateable value and is therefore subject to business rates.
However, the rules surrounding business rates on empty property are not as straightforward as they may seem. In England, the government has implemented certain relief schemes that property owners can apply for to reduce or eliminate the amount of business rates they have to pay on empty property. One such relief scheme is called Empty Property Rates Relief (EPRR), which provides a 100% relief on business rates for the first three months that a property is empty. After the initial three-month period, the property owner will be required to pay the full amount of business rates unless they qualify for another relief scheme.
Another relief scheme that property owners may be eligible for is called Small Business Rates Relief (SBRR). This relief scheme is specifically aimed at small businesses that occupy only one property. Under SBRR, eligible businesses can receive a discount on their business rates if the rateable value of their property is below a certain threshold. Small businesses that qualify for SBRR may be able to receive up to a 100% discount on their business rates, even if their property is empty.
In some cases, property owners may be exempt from paying business rates on empty property altogether. This can happen if the property falls into certain categories, such as industrial properties that are used for storage only or listed buildings that are undergoing repairs or structural alterations. Property owners should check with their local council to see if their empty property qualifies for any exemptions from business rates.
It is important for property owners to be aware of the rules and regulations surrounding business rates on empty property to avoid any penalties or fines. Failure to pay business rates on an empty property can result in legal action being taken against the property owner, including court proceedings and even the seizure of the property. Property owners should make sure they understand their obligations and take advantage of any relief schemes that may apply to them.
In conclusion, business rates on empty property are a significant expense for property owners, but there are relief schemes available that can help reduce the amount of business rates they have to pay. Property owners should be aware of the rules and regulations surrounding business rates on empty property and take advantage of any relief schemes or exemptions that they may qualify for. By staying informed and proactive, property owners can minimize the financial impact of business rates on their empty property and ensure compliance with the law.