When running a business, one of the costs that can significantly impact your bottom line is paying business rates on an empty property Empty property rates, also known as non-domestic rates, can quickly add up and eat into your cash flow if not managed properly Fortunately, there are strategies you can employ to avoid or minimize these costs.
Understanding Empty Property Rates
Empty property rates are a tax imposed on commercial properties that have been empty for a certain period of time In the United Kingdom, for example, properties that have been empty for three months or more are subject to this tax The rateable value of the property determines how much you will have to pay in empty property rates.
Avoiding Empty Property Rates
There are several ways you can potentially avoid or reduce the amount of empty property rates you have to pay Here are some strategies to consider:
1 Temporary Occupation: One way to avoid paying empty property rates is to temporarily occupy the property This could involve using the space for short-term projects, events, or even renting it out to temporary tenants By occupying the property, you can reset the clock on the empty property rates period and potentially avoid paying the tax altogether.
2 Property Development: Another strategy to consider is to develop the property Whether it’s renovating the existing space or transforming it into something new, developing the property can help you avoid empty property rates Not only does this strategy create value for the property, but it also demonstrates that you are actively trying to bring the property back into productive use.
3 Register for Exemptions: In some cases, properties may be exempt from empty property rates This could include properties that are listed buildings, properties undergoing major structural repairs, or those owned by charities avoiding business rates on empty property. If you believe your property meets the criteria for an exemption, be sure to apply for it to avoid unnecessary costs.
4 Negotiate with the Local Authority: If you find yourself unable to avoid paying empty property rates, it may be worth reaching out to the local authority to discuss your situation They may be willing to offer a temporary discount or provide guidance on how to reduce the amount you owe Building a positive relationship with the local authority can also be beneficial in case you encounter similar issues in the future.
5 Sublet the Property: If you have an empty property that you are unable to occupy or develop yourself, consider subletting it to another business Not only does this help generate income from the property, but it can also help offset the costs of empty property rates Be sure to check with your local authority and lease agreements to ensure that subletting is allowed.
6 Appeal the Rateable Value: If you believe that the rateable value of your property is inaccurate, you have the right to appeal it This process involves providing evidence to support your claim and working with the local authority to reassess the value By successfully appealing the rateable value, you can potentially reduce the amount you have to pay in empty property rates.
In conclusion, empty property rates can be a significant expense for businesses, but there are strategies you can employ to avoid or minimize these costs By understanding the regulations surrounding empty property rates, exploring different options for occupying or developing the property, and seeking exemptions or negotiating with the local authority, you can protect your bottom line and make the most of your commercial property investments Remember to stay proactive and informed when it comes to managing empty properties to ensure that you are not paying more than necessary in business rates.