Business rates are a crucial aspect of running a business, as they are taxes charged on most commercial properties. However, there is a lesser-known type of business rates called void business rates. In this article, we will delve into what void business rates are, how they are calculated, and what implications they have for businesses.
void business rates refer to the rates charged on empty commercial properties. When a property is empty and not in use, it is still liable for business rates. This can be a significant financial burden for businesses that may be struggling or going through a period of transition.
The calculation of void business rates is based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate the amount of business rates that must be paid. The rateable value is assessed based on factors such as the size and location of the property, as well as its intended use.
The amount of void business rates that must be paid on an empty property depends on the length of time that the property has been unoccupied. In England, for example, businesses are given a three-month exemption period during which no rates are due on a property that is empty. After this initial three-month period, full rates are charged on the property.
After a property has been empty for 12 months or more, the business owner may be eligible for a 100% discount on the void business rates for the first three months. This discount can provide some relief to businesses that are struggling with the financial burden of paying rates on an empty property.
It’s important for businesses to be aware of the implications of void business rates, as failing to pay these rates can result in legal action being taken against the business owner. This can include court proceedings and the seizure of assets to cover the outstanding rates.
There are steps that businesses can take to mitigate the impact of void business rates. One option is to seek advice from a business rates specialist who can help to assess the situation and provide guidance on how to reduce the rates that are due. In some cases, it may be possible to apply for relief or exemption from void business rates, depending on the circumstances of the property.
Another option for businesses facing void business rates is to consider leasing out the empty property to generate income. By finding a tenant for the property, businesses can avoid paying void business rates and generate additional revenue. This can be a win-win situation for both the business owner and the tenant, as the property is put to good use and the business owner is able to recoup some of the costs associated with the empty property.
Business owners should also be aware of any changes to the regulations around void business rates, as these can have a significant impact on their financial obligations. Keeping up to date with any updates or changes to the rules regarding void business rates can help businesses to plan ahead and avoid any unexpected financial surprises.
In conclusion, void business rates are an important aspect of running a business, particularly for properties that are empty and not in use. Understanding how void business rates are calculated and what options are available for mitigating their impact can help businesses to navigate this aspect of their financial obligations. By seeking advice from a business rates specialist and staying informed about the regulations surrounding void business rates, businesses can better manage this financial aspect of their operations.