When it comes to running a business, there are countless expenses that come into play. From rent and utilities to employee salaries and inventory costs, managing these expenses is crucial to the success of a business. However, one often overlooked expense that can catch many business owners off guard is void business rates.
Void business rates, also known as empty property rates, are taxes imposed on businesses that occupy vacant commercial properties. These rates are charged by local authorities to encourage property owners to occupy their buildings and prevent them from sitting empty for extended periods of time. In essence, void business rates are a way for local governments to stimulate economic activity and prevent blight in commercial areas.
Understanding how void business rates work and how they can affect your business is crucial for any property owner. In this article, we will explore the ins and outs of void business rates, from who is responsible for paying them to how they are calculated.
Who is Responsible for void business rates?
When a commercial property becomes vacant, the responsibility for paying void business rates falls on the property owner. This means that if you own a commercial property that is empty, you will be liable for paying the void business rates unless certain exemptions apply.
It’s important to note that void business rates are separate from regular business rates, which are paid by businesses that are actively operating out of a property. When a property becomes vacant, it is no longer eligible for the standard business rate relief, and instead, void business rates come into play.
How Are void business rates Calculated?
Void business rates are calculated based on the rateable value of the property in question. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate the amount of business rates that a property owner must pay. In the case of void business rates, the rateable value is multiplied by the relevant multiplier set by the local authority to determine the total amount owed.
It’s worth noting that different local authorities may have different rules and regulations when it comes to void business rates, so it’s essential to check with your local council to understand the specific requirements in your area.
Exemptions and Relief Options
While void business rates are mandatory for most vacant commercial properties, there are some exemptions and relief options available for property owners. These exemptions are designed to provide temporary relief for property owners who are actively seeking to rent or sell their properties.
One common exemption is the empty property rate relief, which provides a 100% discount on the void business rates for the first three months that a property is vacant. After the initial three-month period, the property owner will be required to pay the full void business rates unless they qualify for other forms of relief.
Another option for property owners is the hardship relief, which provides a temporary discount on the void business rates for properties that are experiencing financial difficulties. To qualify for hardship relief, property owners must demonstrate that they are actively seeking to let or sell the property but have been unable to do so due to economic challenges.
It’s essential for property owners to explore all available options for relief and exemptions to ensure that they are not paying more void business rates than necessary.
Impact on Property Owners
Void business rates can have a significant impact on property owners, especially those who own multiple vacant properties or properties that are difficult to let or sell. The financial burden of paying void business rates can add up quickly, especially if a property remains vacant for an extended period of time.
In addition to the financial implications, void business rates can also deter property owners from keeping their buildings empty, which can have a positive impact on the local economy. By incentivizing property owners to occupy their buildings, void business rates can help to revitalize commercial areas and promote economic growth.
Final Thoughts
Void business rates are a necessary expense for property owners with vacant commercial properties. Understanding how void business rates work, who is responsible for paying them, and what relief options are available is crucial for managing this expense effectively.
While void business rates can be a significant financial burden, property owners can take advantage of exemptions and relief options to mitigate the impact. By staying informed and exploring all available options, property owners can navigate void business rates successfully and ensure the profitability of their investments.