The business landscape can be a complex and challenging terrain to navigate, and one of the obstacles that business owners often face is the issue of business rates on empty commercial property. Business rates are taxes paid on non-residential properties, and they can be a significant financial burden for businesses, especially when they have to pay them on properties that are sitting empty. In this article, we will explore the implications of business rates on empty commercial property and provide some potential solutions for business owners facing this challenge.
Business rates are one of the many expenses that business owners must contend with when running a commercial property. These rates are determined by the rateable value of the property, which is an estimate of its open market rental value on a certain date. The amount that a business owner must pay in business rates is calculated by multiplying the rateable value of the property by the national non-domestic multiplier, which is set annually by the government.
The issue of business rates on empty commercial property arises when a business owner has a property that is not generating any income, either because it is vacant or undergoing refurbishment. In these cases, business owners are still required to pay business rates on the property, which can add up to a significant amount of money over time. This can be a major financial strain for businesses that are already struggling to make ends meet, especially in challenging economic times.
There are some exemptions and reliefs available to business owners who have empty commercial property. For example, properties with a rateable value of less than £2,900 are eligible for small business rates relief, which means they do not have to pay any business rates. Additionally, properties that are undergoing major refurbishment or structural changes may qualify for an exemption from business rates for a certain period of time. However, these exemptions and reliefs are not always easy to obtain, and many business owners find themselves having to pay business rates on empty commercial property.
One potential solution for business owners facing the challenge of business rates on empty commercial property is to consider leasing or selling the property. By leasing the property to another business or selling it to a new owner, business owners can transfer the burden of paying business rates to someone else. However, finding a tenant or buyer for an empty commercial property can be a difficult and time-consuming process, especially in a competitive market.
Another potential solution is to explore the possibility of appealing the rateable value of the property. If a business owner believes that the rateable value of their property is too high, they can submit an appeal to the Valuation Office Agency, which assesses rateable values for business rates purposes. If the appeal is successful, the rateable value of the property will be reduced, resulting in lower business rates payments for the business owner.
Business owners can also consider taking advantage of government schemes and initiatives designed to support businesses with empty commercial property. For example, the government’s business rates retention scheme allows local authorities to retain a portion of the business rates collected in their area, which they can then use to provide relief to businesses facing financial difficulties. Business owners should check with their local council to see what support is available to them.
In conclusion, business rates on empty commercial property can be a major challenge for business owners, but there are potential solutions that can help alleviate the financial burden. By exploring exemptions and reliefs, leasing or selling the property, appealing the rateable value, and taking advantage of government initiatives, business owners can find ways to navigate the challenges of business rates on empty commercial property. With careful planning and strategic decision-making, business owners can overcome this obstacle and continue to thrive in the competitive business landscape.