Business rates are taxes that are charged on most non-domestic properties, such as shops, offices, and warehouses. These rates are a significant expense for businesses, and they are used to help fund local services provided by the government. However, when a property is left unoccupied, businesses may still be liable to pay business rates on that property. This is known as unoccupied business rates.
Unoccupied business rates are a topic that many businesses may not be aware of until they find themselves in a situation where they are liable to pay them. In this article, we will explore what unoccupied business rates are, how they are calculated, and how they can impact businesses.
What are unoccupied business rates?
Unoccupied business rates are a form of business rates that are charged on properties that are not in use. This could be a property that is empty for a short period of time, or one that is left vacant for an extended period. The idea behind unoccupied business rates is to discourage property owners from keeping properties empty for long periods of time, as this can have a negative impact on the local economy.
It is important to note that unoccupied business rates are not charged on all empty properties. There are certain exemptions and reliefs available that may reduce or eliminate the amount of unoccupied business rates that a business has to pay. For example, properties that are undergoing major repairs or renovations may be eligible for a temporary exemption from unoccupied business rates.
How are unoccupied business rates Calculated?
Unoccupied business rates are calculated in a similar way to standard business rates. The rateable value of the property is determined by the Valuation Office Agency (VOA), and this is used to calculate the amount of business rates that are due. However, there are some differences in how unoccupied business rates are calculated.
One key difference is the rate of unoccupied business rates. In most cases, properties that are empty for three months or less are exempt from unoccupied business rates. After this period, the property owner may be required to pay 100% of the standard business rates. This can be a significant expense for businesses, especially if they are struggling financially or if the property has been empty for an extended period.
Properties that have been empty for more than three months but less than six months may be eligible for a 50% discount on their unoccupied business rates. This discount is designed to provide some relief to businesses that are trying to find a new tenant or carry out repairs to make the property usable again.
Properties that have been empty for more than six months may be eligible for a 100% exemption from unoccupied business rates for an additional three months. After this period, the property owner may be required to pay 100% of the standard business rates.
How do unoccupied business rates Impact Businesses?
Unoccupied business rates can have a significant impact on businesses, especially small businesses that may be struggling financially. The cost of unoccupied business rates can add up quickly, especially if a property has been empty for an extended period. This can put additional pressure on business owners who are already dealing with other expenses, such as rent, utilities, and wages.
In some cases, businesses may be forced to close down or sell their property in order to avoid paying unoccupied business rates. This can have a negative impact on the local economy, as it can lead to more empty properties and fewer businesses operating in the area.
It is important for businesses to be aware of their obligations when it comes to unoccupied business rates. By understanding how unoccupied business rates are calculated and how they can impact businesses, business owners can take steps to minimize the impact of unoccupied business rates on their finances.
In conclusion, unoccupied business rates are a form of business rates that are charged on properties that are not in use. These rates can have a significant impact on businesses, especially small businesses that may be struggling financially. By understanding how unoccupied business rates are calculated and how they can impact businesses, business owners can take steps to minimize the impact of unoccupied business rates on their finances.