Business rates are a form of tax that is levied on most non-domestic properties, including shops, offices, and warehouses In the UK, the amount of business rates that a property owner has to pay is determined by the rateable value of the property, which is set by the Valuation Office Agency However, what happens when a property is left unoccupied? This is where things can get a little more complicated.
When a property is unoccupied, the owner of the property is still liable to pay business rates This is because business rates are a tax on the property itself, rather than on the business that operates within it The rationale behind this is to prevent property owners from leaving their properties empty in order to avoid paying business rates.
The amount of business rates that an unoccupied property owner has to pay is often a contentious issue Many property owners argue that having to pay business rates on an unoccupied property is unfair, especially when the property is not generating any income However, the government maintains that business rates are an essential source of revenue for local authorities and that all property owners, whether their properties are occupied or not, should contribute towards the cost of local services.
There are some exemptions and reliefs available for unoccupied properties when it comes to business rates For example, properties that are undergoing major repair work or structural alterations may qualify for a temporary exemption from business rates This exemption usually lasts for 3 months, after which the property owner will have to start paying business rates again.
There is also a scheme called Small Business Rates Relief, which provides relief for small business owners who only occupy one property and qualify for the relief business rates unoccupied property. If a property owner is eligible for Small Business Rates Relief and their property becomes unoccupied, they may still be entitled to the relief for a certain period of time, depending on the local authority’s policy.
Another option for property owners with unoccupied properties is to consider leasing the property to a charity Properties that are occupied by a charity are usually entitled to an 80% discount on their business rates This can be a win-win situation for both the property owner and the charity, as the property owner will pay less in business rates while the charity will benefit from having a physical space to operate from.
It is important for property owners to be aware of the implications of leaving a property unoccupied when it comes to business rates Failing to pay business rates can result in legal action being taken against the property owner, including enforcement action such as bailiffs seizing goods from the property to cover the outstanding debt.
Some property owners may also consider demolishing the unoccupied property in order to avoid paying business rates However, this may not be a foolproof solution, as the local authority may still consider the land to be a rateable property and levy business rates on it accordingly.
In conclusion, business rates on unoccupied property are a complex issue that requires careful consideration by property owners It is important to be aware of the exemptions and reliefs that are available, as well as the consequences of not paying business rates on time By staying informed and proactive, property owners can navigate the world of business rates more effectively and make informed decisions about their unoccupied properties.