When it comes to running a business, there are many costs to consider. From rent to payroll to utilities, the expenses can quickly add up. One cost that often catches business owners off guard is void business rates. These rates are charged on commercial properties that are empty or unoccupied for an extended period of time. In this article, we will explore what void business rates are, how they are calculated, and what you can do to mitigate their impact on your business.
What are void business rates?
Void business rates are a form of tax that is levied on commercial properties that are empty or unoccupied for a certain period of time. In the United Kingdom, these rates are charged on properties that have been vacant for more than three months. The idea behind void business rates is to discourage property owners from leaving their buildings empty for extended periods of time, as this can have a negative impact on the local community and economy.
How are void business rates Calculated?
Void business rates are typically calculated based on the rateable value of the property in question. The rateable value is set by the Valuation Office Agency (VOA) and represents an estimate of the yearly rental value of the property. The rateable value is then used to determine the amount of void business rates that must be paid.
In most cases, void business rates are charged at the full rate, meaning that property owners are required to pay the same amount as if the property were occupied. This can create a significant financial burden for businesses that are unable to find tenants for their properties.
What Can You Do to Mitigate the Impact of void business rates?
If your business is facing void business rates, there are a few steps you can take to mitigate their impact. One option is to appeal the rateable value of your property. If you believe that the rateable value has been set too high, you can submit an appeal to the VOA. If successful, this could result in a lower rateable value and a reduction in void business rates.
Another option is to consider leasing or subletting your property. By finding a tenant or subtenant for your property, you can avoid paying void business rates altogether. This can be a good way to generate income from an empty property while also helping to revitalize the local area.
You could also consider speaking to your local council about any business rates relief schemes that may be available. Some councils offer discounts or exemptions for businesses that are struggling to pay their rates, which can provide some much-needed financial relief.
Lastly, if you are unable to find a tenant for your property and are struggling to pay void business rates, you may want to consider selling the property. While this may not be an ideal solution, it can help to relieve the financial burden of empty property taxes.
In conclusion, void business rates can be a significant cost for businesses that have empty properties. By understanding what void business rates are, how they are calculated, and what you can do to mitigate their impact, you can take steps to reduce the financial burden on your business. Whether through appealing the rateable value, finding a tenant, or exploring business rates relief schemes, there are ways to navigate the challenges of void business rates and keep your business financially viable.