Business rates can be a significant financial burden for property owners, especially when their properties sit empty. In the UK, owners of non-domestic properties are required to pay business rates on their buildings, even if they are vacant. However, there are legal ways to minimize or completely avoid paying these rates on empty properties. By understanding the rules and regulations surrounding business rates, property owners can potentially save thousands of pounds each year. In this article, we will explore some strategies for avoiding business rates on empty property.
One of the most common ways to avoid paying business rates on empty property is by taking advantage of the exemptions and reliefs that are available. The government offers a number of schemes that property owners can apply for to reduce or eliminate their business rates liability. For example, properties that are undergoing major repair or structural changes may be eligible for relief from business rates. Additionally, properties that are being redeveloped or are considered unsafe to occupy may also qualify for exemptions. It is important for property owners to thoroughly research the available schemes and see if they qualify for any of them.
Another strategy for avoiding business rates on empty property is by actively marketing the property for rent or sale. Property owners can apply for a three-month exemption from business rates if they can prove that they are actively trying to find a tenant or buyer for the property. This exemption can be extended for a further three months if the property remains unoccupied. By demonstrating that they are making efforts to fill the property, owners can buy themselves some time before they have to start paying business rates again.
It is also worth noting that there are certain types of properties that are exempt from business rates altogether. For example, agricultural buildings and buildings used for charity purposes are not subject to business rates. Properties that are empty due to legal restrictions, such as planning permission issues, may also be exempt. Property owners should familiarize themselves with the specific rules and regulations that apply to their type of property to see if they can qualify for an exemption.
Some property owners choose to demolish their empty buildings in order to avoid paying business rates. While this may seem extreme, it can be a cost-effective way to get out of paying rates on a property that is not generating any income. However, it is important to note that owners will still be liable for rates on the land itself, so this strategy may not be suitable for every situation.
In some cases, property owners may be able to negotiate with their local council to reduce their business rates liability on empty property. Councils have the discretion to offer discounts or payment plans to property owners who are struggling to pay their rates. By demonstrating financial hardship or other compelling reasons, owners may be able to secure a lower rate or defer payment until the property is occupied.
It is important for property owners to stay informed about changes to business rates legislation that could affect their empty properties. The government regularly reviews and updates the rules surrounding business rates, so it is crucial to keep abreast of any new developments. Property owners can seek advice from legal and financial professionals to ensure that they are taking advantage of all available opportunities to minimize their rates liability.
In conclusion, avoiding business rates on empty property is possible with careful planning and research. By exploring the exemptions, reliefs, and strategies outlined in this article, property owners can save money and reduce their financial burden. Whether through taking advantage of government schemes, actively marketing the property, seeking exemptions, demolishing the building, negotiating with the council, or staying informed about changes in legislation, there are various ways to avoid paying rates on empty property. With the right approach, property owners can maximize their savings and make their investments more profitable.