When it comes to running a business, there are various costs and expenses that must be taken into consideration. One of the most significant expenses that business owners face is business rates. These rates are contributed towards local services such as street cleaning, police and fire services, and maintenance of the local area. However, what happens when a business property becomes vacant? This is where void business rates come into play.
void business rates refer to the business rates that must be paid on a commercial property that is vacant. In other words, even if your business property is not currently being used or generating any income, you are still liable to pay business rates on the property. This can come as a surprise to many business owners who may not have factored in this cost when deciding to leave a property vacant.
The rationale behind void business rates is to discourage property owners from leaving their properties empty for extended periods. The government aims to prevent properties from becoming eyesores or blights on the local community by imposing a financial penalty on those who choose to keep their properties vacant.
It’s important for business owners to understand the implications of void business rates and how they can navigate this aspect of their business finances. Here are some key points to consider:
1. How are void business rates calculated?
Void business rates are calculated in the same way as regular business rates, based on the rateable value of the property. The rateable value is assessed by the Valuation Office Agency (VOA) and is used to determine how much the property owner will need to pay in business rates.
When a property becomes vacant, the owner is required to inform the local council. The council will then apply a temporary exemption period, usually lasting for three months. During this period, no business rates will be payable on the property. However, once the exemption period ends, the property owner will be liable to pay the full business rates on the property.
2. Are there any exemptions or reliefs available?
While void business rates can be a significant burden for property owners, there are certain exemptions and reliefs that may apply in certain circumstances. For example, if a property is undergoing major renovation or structural repairs, the property owner may be eligible for relief from void business rates. This is known as the “unoccupied property rate relief.”
Additionally, if a property is deemed to be of a relatively low rateable value, the property owner may be eligible for small business rate relief. This can help to reduce the amount of the business rates payable on the property.
It’s important for property owners to be aware of any potential exemptions or reliefs that may apply to their situation and to seek guidance from the local council or a business rates specialist if needed.
3. What are the consequences of non-payment?
Failure to pay void business rates can have serious consequences for property owners. The local council has the authority to take legal action against property owners who fail to pay the business rates on their vacant properties.
This can result in hefty fines, court proceedings, and ultimately, the seizure of the property. It’s essential for property owners to fulfill their obligations and make timely payments to avoid facing these negative repercussions.
In conclusion, void business rates are an important aspect of business finances that property owners must be aware of when dealing with vacant properties. By understanding how void business rates are calculated, exploring potential exemptions and reliefs, and fulfilling payment obligations, property owners can navigate this aspect of their finances effectively. Consulting with a business rates specialist can provide further guidance and support in managing void business rates.