When it comes to owning commercial property, there are many costs and responsibilities that come with the territory. One of the expenses that can catch property owners off-guard is the rates payable on empty commercial property. These rates, also known as business rates, can be a significant financial burden for property owners, especially when the property is vacant. In this article, we will explore what rates payable on empty commercial property entail, how they are calculated, and what property owners can do to minimize the impact on their bottom line.
Business rates are a tax that is charged on most non-domestic properties in the UK. This includes commercial properties such as shops, offices, warehouses, and factories. The rates payable on empty commercial property are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is the rental value of the property as determined by the VOA, and it is used to calculate the amount of rates that the property owner must pay.
When a commercial property is empty, the property owner is still required to pay business rates unless they qualify for an exemption or relief. This can be a significant financial burden for property owners, especially if the property remains vacant for an extended period of time. In some cases, property owners may be eligible for relief or exemptions, such as Small Business Rate Relief or Empty Property Relief. However, these relief schemes are subject to certain criteria and may not be available to all property owners.
The rates payable on empty commercial property are calculated based on the rateable value of the property and the multiplier set by the government. The multiplier is the rate in the pound at which business rates are charged, and it is determined by the government each year. For the current financial year, the standard multiplier in England is 51.2p and in Wales is 53.5p. The rates payable on empty commercial property are calculated by multiplying the rateable value of the property by the multiplier.
Property owners can take steps to minimize the impact of rates payable on empty commercial property. One option is to negotiate with the local council for a reduction in rates based on the condition of the property or changes in the local area that may impact the property’s value. Property owners can also consider leasing the property on a short-term basis to a temporary tenant, which may qualify for relief under the Empty Property Relief scheme. Another option is to invest in the property to make it more attractive to potential tenants, which can help reduce the time the property remains vacant and the amount of rates payable.
It is important for property owners to be aware of their obligations when it comes to rates payable on empty commercial property. Failure to pay business rates can result in legal action being taken against the property owner, including court proceedings and enforcement action by the local council. Property owners should be proactive in seeking advice and assistance from a qualified professional to ensure they are compliant with their obligations and to explore all options available to minimize the impact of rates payable on empty commercial property.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated and exploring options for relief or exemptions can help property owners minimize the impact on their bottom line. By being proactive and seeking advice from a qualified professional, property owners can navigate the complexities of business rates and ensure they are compliant with their obligations.