Business rates can be a significant financial burden for property owners, especially when their properties sit empty for extended periods. Empty properties are subject to business rates, which can add up to thousands of pounds in additional expenses each year. However, there are strategies that property owners can employ to legally avoid paying business rates on empty properties. In this article, we will explore some of these strategies and share insight on how property owners can save money by minimizing their business rate liabilities.
One of the most effective ways to avoid paying business rates on empty property is by utilizing the empty property relief scheme. This scheme allows property owners to apply for a temporary exemption from paying business rates on their empty properties. The length of the exemption period varies depending on the type of property and its location, but in most cases, property owners can expect to receive relief for at least three months and up to six or even 12 months in certain circumstances.
To qualify for empty property relief, property owners must demonstrate that their property is genuinely empty and that they are actively seeking tenants or buyers. Property owners will need to provide evidence of their efforts to market the property, such as listing the property with commercial real estate agents, advertising it on property listing websites, and conducting viewings for potential tenants or buyers. Additionally, property owners may be required to prove that the property is not in use for any business purposes, such as storage or office space rental.
Another strategy to minimize business rate liabilities on empty property is by exploring the option of partially occupying the property. By using a small portion of the property for business purposes, property owners can qualify for a reduced rate relief. The rateable value of the property will be adjusted to reflect the occupied portion, resulting in lower business rates payable. This strategy can be particularly beneficial for property owners who are unable to secure tenants for the entire property but still wish to make some use of the space.
In some cases, property owners may be able to take advantage of the Business Rates Avoidance Schemes. These schemes involve legally manipulating the property to minimize its rateable value and, consequently, reduce the business rates payable. While these schemes can be effective in lowering business rate liabilities, property owners should exercise caution and seek professional advice to ensure that they are compliant with the law. Engaging with a reputable tax advisor or property consultant can help property owners navigate the complexities of business rates avoidance schemes and avoid potential legal issues.
Property owners can also consider applying for hardship relief if they are experiencing financial difficulties that prevent them from paying the full amount of business rates on their empty properties. Hardship relief is granted on a case-by-case basis and is typically reserved for property owners who can demonstrate genuine financial hardship, such as loss of income or unexpected expenses. Property owners will need to submit a detailed financial statement and supporting evidence to support their application for hardship relief, and decisions are at the discretion of the local council.
Additionally, property owners should be aware of the various exemptions and reliefs available for specific types of properties, such as listed buildings, agricultural land, and properties undergoing structural repairs or renovations. These exemptions can substantially reduce or eliminate business rate liabilities for eligible properties, providing property owners with significant cost savings. Property owners should thoroughly research the eligibility criteria for these exemptions and reliefs and consider seeking professional advice to ensure that they are maximizing their savings on business rates.
In conclusion, avoiding business rates on empty property is possible through various strategies, such as applying for empty property relief, partially occupying the property, utilizing business rates avoidance schemes, and exploring hardship relief and other exemptions and reliefs. By taking advantage of these strategies and actively managing their business rate liabilities, property owners can minimize their expenses and preserve their finances while waiting for their properties to be occupied or sold. Property owners should stay informed about changes in business rates legislation and seek professional advice to ensure compliance with the law and maximize savings on business rates.