Business rates can be a significant expense for property owners, especially when the property is sitting empty. However, there are ways to legally avoid paying business rates on empty property. In this article, we will explore some strategies that property owners can use to minimize or eliminate their business rates liabilities.
One commonly used strategy for avoiding business rates on empty property is to temporarily occupy the space with a licensed short-term tenant. By doing so, the property can qualify for an exemption under the Empty Property Rates Relief scheme. This scheme allows property owners to claim a 100% exemption for up to three months if the property is occupied by a licensed short-term tenant. This can be a cost-effective way to minimize business rates liabilities while also generating some income from the property.
Another option for avoiding business rates on empty property is to seek a temporary exemption under the Business Rates (Empty Property) Regulations. This regulation allows property owners to claim a 100% exemption for three months after the property becomes empty. After the initial three-month period, the property owner can apply for a further three-month exemption if they can demonstrate that they are actively seeking to bring the property back into use. This exemption can be extended for up to a total of six months, providing the property owner with some breathing room to find a new occupant for the property.
Property owners can also explore the option of demolishing the empty property to avoid business rates liabilities. If a property is demolished, it is no longer liable for business rates. Property owners should be aware, however, that there may be planning permission and other regulatory requirements to consider before demolishing a property. It is important to consult with legal and financial advisers before taking this step to ensure that all necessary permissions are in place and that there are no unintended consequences.
One final strategy for avoiding business rates on empty property is to consider applying for discretionary rate relief from the local council. While this option is not guaranteed, some councils do have discretionary powers to grant relief on a case-by-case basis. Property owners can make their case to the council by demonstrating that they have made reasonable efforts to market the property and that they are actively seeking to bring it back into use. It is important to provide detailed evidence and documentation to support the application for discretionary rate relief.
In addition to these strategies, property owners can take proactive steps to minimize their business rates liabilities on empty property. One option is to negotiate with the local council to agree on a reduced rate for the empty property. Councils may be willing to consider such requests, especially if the property owner can demonstrate that they are facing financial hardship or if the property has been empty for an extended period.
Property owners can also consider exploring alternative uses for the empty property that may qualify for a different business rates relief scheme. For example, if the property is used for charitable purposes or as a community facility, it may be eligible for relief under the Charitable Rate Relief or Community Amateur Sports Club Relief schemes. Property owners should investigate all potential avenues for relief to ensure that they are not paying more in business rates than necessary.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property. By exploring options such as temporary occupation, exemptions under regulations, demolition, discretionary rate relief, and negotiating with the local council, property owners can minimize their business rates liabilities and potentially save a significant amount of money. It is important to seek legal and financial advice before taking any action to ensure compliance with regulations and maximize the chances of success in avoiding business rates on empty property.