unoccupied business rates, often referred to as business rates on empty properties, can be a significant financial burden for businesses that find themselves with unused or vacant commercial properties. These rates are charged by local authorities on properties that are unoccupied for a certain period of time, and they can add up quickly if left unchecked. In this article, we will explore what unoccupied business rates are, how they are calculated, and what businesses can do to mitigate the impact of these charges.
As the name suggests, unoccupied business rates are fees that are charged by local councils on commercial properties that are empty or unused. These rates were introduced as a way to encourage property owners to bring vacant properties back into use, as empty properties can have a negative impact on the local community and economy. By charging unoccupied business rates, local authorities hope to reduce the number of empty properties and stimulate economic growth.
The rates themselves are calculated based on the rateable value of the property. The rateable value is an estimate of the annual rent that the property could command on the open market, and it is used by local authorities to determine how much business rates are owed. For unoccupied properties, the rateable value is still used to calculate the rates, but the charges are typically higher than they would be for occupied properties. This is because local councils want to incentivize property owners to bring empty properties back into use as quickly as possible.
The exact amount of unoccupied business rates that a property owner will have to pay can vary depending on the local authority and the specific circumstances of the property. In England, for example, properties that have been empty for more than three months are generally subject to a premium of 100% on top of the standard business rates. In Scotland, the premium is set at 100% for properties that have been empty for more than three months, and this can increase to 200% for properties that have been empty for more than a year.
For businesses that find themselves facing high unoccupied business rates, there are a few options available to help mitigate the financial impact. One option is to apply for relief from the local council. Some councils offer relief schemes for empty properties, which can help to reduce the amount of business rates that are owed. For example, in England, certain types of property, such as industrial buildings or listed buildings, may be eligible for relief from unoccupied business rates. Property owners can also apply for hardship relief if they can demonstrate that paying the rates would cause them undue financial hardship.
Another option for businesses facing high unoccupied business rates is to consider renting out the property on a short-term basis. By finding a temporary tenant for the property, businesses can generate some income from the property and potentially reduce the amount of business rates that are owed. However, it is important to note that renting out a property on a short-term basis may not always be feasible, depending on the condition of the property and the local rental market.
Ultimately, unoccupied business rates can be a significant financial burden for businesses that find themselves with empty properties. However, by understanding how these rates are calculated and exploring options for relief or rental, businesses can take steps to mitigate the impact of unoccupied business rates. As local authorities continue to use these rates as a tool to encourage property owners to bring vacant properties back into use, it is important for businesses to stay informed and proactive in managing their vacant properties. By taking the necessary steps to address unoccupied business rates, businesses can minimize the financial impact and contribute to the economic vitality of their communities.