Void business rates can be a significant concern for property owners and businesses alike. These rates are charged on empty commercial properties, placing a financial burden on owners until new tenants are found. In this article, we will delve into what void business rates are, how they are calculated, and what you can do to minimize the impact on your business.
What are void business rates?
Void business rates are taxes levied on commercial properties that are empty or unoccupied. The idea behind these rates is to discourage property owners from leaving their buildings vacant for an extended period. The premise is that empty properties can have a negative impact on the local economy and community, and charging void business rates incentivizes owners to find new tenants quickly.
How are void business rates Calculated?
The calculation of void business rates can vary depending on the location and size of the property. In most cases, the rates are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value represents an estimate of the yearly rental value of the property if it were rented on the open market.
Once the rateable value is established, it is multiplied by the appropriate multiplier set by the government. This multiplier is known as the business rates multiplier and is set annually. The resulting figure is the amount of void business rates that the property owner is required to pay.
Ways to Minimize the Impact of void business rates
Void business rates can be a significant financial burden for property owners, especially during times of economic uncertainty. However, there are steps that owners can take to minimize the impact of these rates on their business:
1. Appeal the Rateable Value: Property owners have the right to appeal the rateable value assigned to their property by the VOA. If the rateable value is deemed to be inaccurate, the property owner may be able to reduce their void business rates liability.
2. Utilize Empty Property Relief: In some cases, property owners may be eligible for empty property relief, which provides a discount on void business rates for a specified period. This relief is typically available for the first three months that a property is empty, and in some cases, may be extended for up to six months for certain types of properties.
3. Consider Short-Term Leases: If you are struggling to find a long-term tenant for your property, consider offering short-term leases to fill the space temporarily. While this may not be an ideal solution, it can help offset the void business rates liability until a more permanent tenant is found.
4. Explore Business Rates Relief Schemes: There are various business rates relief schemes available to certain types of businesses and properties. For example, retail properties may be eligible for retail relief, which provides a significant discount on business rates. It is worth exploring these schemes to see if your property qualifies for any relief.
5. Consult with a Property Expert: If you are struggling to navigate the complexities of void business rates, consider seeking advice from a property expert or chartered surveyor. These professionals can provide guidance on how to minimize your void business rates liability and help you explore alternative solutions for your empty property.
In conclusion, void business rates can be a challenging aspect of property ownership, but with careful planning and proactive measures, property owners can mitigate the financial impact of these rates. By appealing the rateable value, utilizing empty property relief, considering short-term leases, exploring business rates relief schemes, and consulting with experts, property owners can effectively manage their void business rates liability.