As a business owner, you may have heard of void business rates, but what exactly are they and how do they impact your business? In this article, we will break down everything you need to know about void business rates, including what they are, how they are calculated, and how you can avoid paying more than necessary.
What are void business rates?
Void business rates are taxes that a business owner must pay on a property that is empty or unoccupied. These rates apply to commercial properties such as shops, offices, and warehouses that are not being used for business purposes. The idea behind void business rates is to discourage property owners from leaving their properties empty for extended periods of time.
How are void business rates calculated?
The calculation of void business rates can vary depending on the location of the property and the size of the space. In most cases, the rates are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the annual rent that a property could fetch on the open market.
Once the rateable value is determined, the business rates are calculated by applying a multiplier set by the government. The multiplier is expressed as a percentage of the rateable value and is updated annually. For example, if the rateable value of a property is £20,000 and the multiplier is set at 50p, the annual business rates would be £10,000.
How can you avoid paying void business rates?
As a business owner, paying void business rates on an empty property can quickly add up and eat into your profits. To avoid paying more than necessary, there are a few strategies you can employ:
1. Temporary occupation: One way to avoid void business rates is to temporarily occupy the property with a short-term tenant or pop-up shop. By having someone use the space, even if only for a short period, you can qualify for exemptions or discounts on the rates.
2. Renovation or refurbishment: If your property is empty because it is in need of renovation or refurbishment, you may be eligible for relief on void business rates. By demonstrating that the property is undergoing significant improvements, you may qualify for a temporary exemption from paying the rates.
3. Negotiate with the local council: In cases where a property has been empty for an extended period due to circumstances beyond your control, such as economic downturns or unforeseen events, you can appeal to the local council for relief on void business rates. The council has the discretion to grant exemptions or discounts based on individual circumstances.
4. Seek professional advice: Dealing with void business rates can be complex, especially if you own multiple properties or have unique circumstances. Seeking professional advice from a commercial property specialist or tax advisor can help you navigate the intricacies of void business rates and ensure that you are not paying more than necessary.
In conclusion, void business rates are a reality that business owners with empty properties must contend with. By understanding how these rates are calculated and exploring strategies to minimize their impact, you can effectively manage your expenses and maximize your profits. Whether through temporary occupation, renovation, negotiation with the council, or seeking professional advice, there are proactive steps you can take to avoid paying more than necessary on void business rates.void business rates.