When it comes to running a business, there are many expenses that need to be taken into consideration. One of the biggest expenses that business owners must deal with is business rates, which are charged on most non-domestic properties, including shops, offices, and warehouses. However, there is one type of business rates that often causes confusion and frustration for many business owners – void business rates.
void business rates are essentially rates that are charged on a property that is empty or unused. This can happen for a variety of reasons, such as when a business moves to a new location, when a property is under renovation, or when a business closes down temporarily or permanently. In these cases, the property is considered to be “void” or vacant, but business rates still need to be paid on it.
Business rates are a significant financial burden for many businesses, and having to pay void business rates on top of regular rates can be a major concern. However, there are some important things that business owners should know about void business rates in order to better understand their obligations and possibly reduce their financial impact.
One of the key things to be aware of is that void business rates are not automatically exempt just because a property is empty. In fact, business owners are still required to pay business rates on empty properties for a certain period of time, which varies depending on the location and type of property. This period is typically around three months for most properties, but it can be longer for certain types of properties, such as industrial buildings.
After this initial period, business owners may be eligible for a business rates relief for void properties, which allows them to receive a discount on their rates. However, in order to qualify for this relief, certain criteria must be met, such as keeping the property in a good condition and actively trying to market it for rent or sale. Failure to meet these requirements can result in the business owner having to pay the full amount of business rates on the property.
Another important thing to keep in mind is that business rates are based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the annual rent that a property could achieve on the open market, and it is used to calculate how much business rates a business owner needs to pay. In the case of void properties, the rateable value is still used as the basis for calculating void business rates, even though the property is not generating any rental income.
Business owners should therefore be careful when it comes to declaring a property as empty or void, as the rateable value can have a significant impact on the amount of business rates that need to be paid. It is important to ensure that the rateable value is accurate and reflective of the actual condition of the property, as any discrepancies could result in business owners paying more in void business rates than necessary.
There are also certain exemptions and reliefs available for specific types of properties when it comes to void business rates. For example, properties that are undergoing major repair or reconstruction work may be eligible for a temporary exemption from business rates. This can be a significant relief for business owners who are investing in the improvement of their properties and are unable to generate any income from them during the work.
In addition, properties that are part of a compulsory purchase order or are legally prohibited from being occupied may also be exempt from void business rates. It is important for business owners to be aware of these exemptions and to take advantage of them when applicable, as they can help reduce the financial burden of empty properties.
In conclusion, void business rates are an important consideration for business owners who have empty or unused properties. Understanding the regulations and requirements surrounding void business rates is essential for managing this financial obligation effectively and minimizing its impact on a business’s bottom line. By staying informed and taking advantage of available exemptions and reliefs, business owners can navigate the complexities of void business rates and ensure that they are not paying more than necessary on their empty properties.