When it comes to owning property, one of the costs that can eat into profits is business rates. These rates are taxes that business owners must pay on non-residential properties, including empty properties. However, there are ways to legally avoid paying business rates on empty property. In this article, we will explore five strategies that property owners can use to reduce or eliminate their business rates liabilities.
1. Claiming Empty Property Relief
One of the most common ways to avoid paying business rates on empty property is to claim Empty Property Relief. This relief provides a 100% discount on business rates for the first three months that a property is empty. After the initial three months, the discount drops to 10%, but property owners can still benefit from significant savings. To qualify for Empty Property Relief, the property must be completely unfurnished and not used for any business purposes.
2. Applying for Small Business Rate Relief
If you own a small business and have an empty property, you may be eligible for Small Business Rate Relief. This relief provides a discount on business rates for businesses that only use one property and have a rateable value of less than £15,000. Depending on the rateable value, businesses can receive discounts ranging from 50% to 100%. By applying for Small Business Rate Relief, property owners can significantly reduce their business rates liabilities on empty properties.
3. Demolishing or Renovating the Property
Another effective way to avoid paying business rates on empty property is to demolish or renovate the property. If a property is undergoing substantial renovation or is scheduled for demolition, property owners can apply for an exemption from business rates. This exemption can last for up to 12 months, providing property owners with a grace period to carry out necessary work on the property without incurring additional costs. By taking proactive steps to improve the property, owners can avoid paying business rates on empty or derelict buildings.
4. Renting Out the Property on a Short-Term Basis
Instead of leaving a property empty and accruing business rates liabilities, property owners can consider renting out the property on a short-term basis. By leasing the property to temporary tenants or pop-up businesses, owners can generate income from the property while avoiding or reducing business rates. Property owners should ensure that any rental agreements comply with local regulations and that the property remains in compliance with planning laws. Renting out the property on a short-term basis can be a creative solution to offset business rates costs on empty properties.
5. Appealing the Rateable Value
If property owners believe that the rateable value assigned to their property is inaccurate, they have the right to appeal the valuation. By submitting evidence such as rental values of similar properties in the area or details of any structural issues with the property, owners can challenge the rateable value and potentially reduce their business rates liabilities. It is important to consult with a professional surveyor or property valuation expert when appealing the rateable value to ensure the best chances of success. By taking proactive steps to challenge the rateable value, property owners can potentially lower their business rates burden on empty properties.
In conclusion, there are several strategies that property owners can use to legally avoid paying business rates on empty property. By claiming Empty Property Relief, applying for Small Business Rate Relief, demolishing or renovating the property, renting out the property on a short-term basis, or appealing the rateable value, owners can reduce or eliminate their business rates liabilities. By exploring these options and staying informed about current regulations, property owners can optimize their tax obligations and maximize their profits. avoiding business rates on empty property is a priority for many owners, and with the right approach, it is possible to minimize costs and protect the financial health of their properties.