When it comes to running a business, there are many costs to consider. One of the expenses that business owners may not always think about is business rates on unoccupied premises. This cost can catch many business owners off guard, so it’s essential to understand what it is and how it can impact your bottom line.
Business rates are a tax that businesses in the UK pay on the non-domestic property they occupy. However, what many business owners don’t realize is that they may still have to pay business rates even if their premises are unoccupied. This can be a significant financial burden, especially for businesses that are struggling or going through a tough time.
The rules around business rates on unoccupied premises can be complicated, so it’s essential to understand how they work. In general, if your business premises are empty, you will not have to pay business rates for the first three months. After that initial period, the local council has the discretion to charge you the full amount, reduce the rate, or even not charge you at all.
The amount of business rates you will have to pay on unoccupied premises will depend on the rateable value of the property. The rateable value is based on the rental value of the property and is determined by the Valuation Office Agency. The higher the rateable value, the more you will have to pay in business rates.
There are a few exceptions to when you may not have to pay business rates on unoccupied premises. If your property is undergoing major repair works or structural alterations, you may be eligible for exemption from paying business rates. Additionally, if your property is listed as an ancient monument, you may also be exempt from paying business rates.
It’s essential to be aware of the rules around business rates on unoccupied premises to avoid any surprises. If you are unsure about whether you have to pay business rates on your empty premises, it’s a good idea to contact your local council or a professional advisor who can provide you with more information.
For businesses that are struggling financially, paying business rates on unoccupied premises can be a significant burden. However, there are steps you can take to try and reduce the amount you have to pay. For example, you can consider leasing out the property, even if it’s only temporarily, to avoid having to pay the full amount of business rates. Alternatively, you can try and negotiate with the local council to see if they are willing to reduce the rate or provide you with a discount.
In some cases, businesses may be able to apply for relief from paying business rates on unoccupied premises. For example, small businesses with a rateable value of less than £15,000 may be eligible for 100% relief for the first three months and then 50% relief after that. Additionally, businesses that are experiencing hardship may also be able to apply for relief from paying business rates on their empty premises.
Overall, business rates on unoccupied premises can be a significant cost for businesses to consider. It’s essential to be aware of the rules and regulations surrounding this expense to avoid any surprises and ensure that you are not paying more than you need to. By understanding how business rates on unoccupied premises work, you can take steps to try and minimize the financial impact on your business.