When it comes to running a business, there are many expenses to consider. From payroll to overhead costs, the financial responsibilities of being a business owner can quickly add up. One cost that often catches many business owners off guard is void business rates. These rates can be a significant financial burden, especially for businesses that have empty commercial properties. In this article, we will explore what void business rates are, how they are calculated, and what you can do to minimize their impact on your business.
First and foremost, let’s define what void business rates are. void business rates are taxes that are levied on commercial properties that are empty or unoccupied. These rates are in addition to the regular business rates that all commercial properties are subject to. The purpose of void business rates is to incentivize property owners to keep their properties occupied, as empty properties can have a negative impact on the local economy and community.
void business rates are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate the business rates that a property owner must pay. When a property becomes vacant, the local council will apply a void rate to the property, which is usually a percentage of the full business rate bill. The exact percentage varies depending on the local authority, but it is typically around 50-100% of the full rate.
One key factor to consider when it comes to void business rates is the length of time that a property remains empty. In most cases, property owners are exempt from void rates for the first three months that a property is unoccupied. However, after the initial three-month period, void rates will typically be applied. This can result in a substantial financial burden for property owners, especially if the property remains empty for an extended period of time.
So, what can property owners do to minimize the impact of void business rates on their bottom line? One option is to actively market the property to potential tenants. By finding a new tenant or buyer for the property, property owners can avoid paying void rates altogether. It may also be worth considering negotiating a reduced rate with the local council if the property is unlikely to be occupied in the near future.
Another option to consider is applying for empty property relief. Empty property relief allows property owners to claim a discount on their void rates if the property is unoccupied for an extended period of time. The amount of relief that can be claimed varies depending on the local authority, but it can provide significant savings for property owners who are struggling to keep their empty properties afloat.
In some cases, property owners may also be able to apply for business rates relief if their property is being renovated or undergoing repairs. This can provide temporary relief from void rates while the property is being brought back into use. It is important to note that each local authority has its own rules and regulations regarding business rates relief, so it is essential to research the options available in your area.
Ultimately, void business rates can be a significant financial burden for property owners, especially in challenging economic times. By understanding how void rates are calculated and exploring options for relief, property owners can minimize the impact of these rates on their business. Whether it’s actively marketing the property, applying for empty property relief, or negotiating a reduced rate with the local council, there are steps that can be taken to alleviate the financial strain of void business rates.
In conclusion, void business rates are an additional expense that property owners must consider when it comes to managing their commercial properties. By staying informed about how void rates are calculated and exploring options for relief, property owners can navigate this financial challenge effectively. Whether it’s finding a new tenant, applying for relief, or negotiating with the local council, there are steps that can be taken to mitigate the impact of void business rates on your business.