When running a business, there are a multitude of expenses that need to be accounted for in order to ensure success. One such expense that can often be overlooked is business rates on empty property. These rates can quickly add up and eat into your bottom line if left unchecked. However, there are steps that can be taken to avoid or minimize these costs. In this article, we will discuss five strategies to help you avoid business rates on empty property.
1. Temporary occupation
One effective way to avoid business rates on empty property is to temporarily occupy the space. By doing so, you can take advantage of the “empty property relief” scheme, which offers a 100% exemption from business rates for a limited period of time. This can buy you some time to find a more permanent solution for the property, such as renting it out or selling it.
To qualify for empty property relief, you must occupy the property for a minimum of six weeks. This can be done by using the space for storage, hosting temporary events, or setting up a pop-up shop. By utilizing the property in this way, you can not only avoid business rates but also potentially generate some additional income in the process.
2. Negotiate with your local authority
If you find yourself with an empty property that you are struggling to fill, it may be worth reaching out to your local authority to negotiate a temporary reduction or exemption from business rates. Many local authorities understand the challenges that businesses face and may be willing to work with you to find a solution that is mutually beneficial.
When approaching your local authority, be prepared to provide them with a detailed plan for how you intend to use the property in the future. By demonstrating that you have a clear strategy in place, you may be able to secure a more favorable arrangement. It is always worth exploring this option before resorting to other measures.
3. Utilize the “Small Business Rate Relief” scheme
If you are a small business owner, you may be eligible for the Small Business Rate Relief scheme, which offers a discount on business rates for properties with a rateable value below a certain threshold. This can help to significantly reduce the financial burden of empty property rates.
To qualify for Small Business Rate Relief, your property must have a rateable value of less than £15,000 in England or £12,000 in Wales, Scotland, and Northern Ireland. If you meet these criteria, you could be eligible for a discount of up to 100% on your business rates. This scheme can provide valuable support to small businesses struggling to cover the costs of empty property rates.
4. Consider demolishing or repurposing the property
If you are unable to find a tenant or buyer for your empty property, it may be worth considering demolishing or repurposing the building. By taking this step, you can potentially avoid paying business rates altogether. However, it is important to weigh the costs and benefits of this option before proceeding.
Demolishing or repurposing a property can be a significant undertaking and may require planning permission from the local authority. Additionally, you will need to consider the potential impact on the surrounding area and any regulations that may apply. Before making a decision, it is advisable to seek professional advice to ensure that you are making the right choice for your business.
5. Explore alternative uses for the property
Another strategy for avoiding business rates on empty property is to explore alternative uses for the space. For example, you could consider renting out the property for short-term leases, converting it into residential accommodation, or partnering with other businesses to create a shared workspace.
By thinking creatively about how you can utilize the property, you may be able to generate income and avoid paying empty property rates. This can not only help to offset the costs of maintaining the property but also open up new opportunities for growth and diversification.
In conclusion, paying business rates on empty property can be a significant financial burden for business owners. However, by implementing the strategies outlined in this article, you can take steps to minimize or avoid these costs altogether. Whether through temporary occupation, negotiation with your local authority, utilizing rate relief schemes, demolishing or repurposing the property, or exploring alternative uses, there are a variety of options available to help you navigate this challenge. By carefully considering your circumstances and seeking professional advice where necessary, you can set yourself up for success and protect your bottom line.