When it comes to running a business, there are a plethora of expenses that business owners must consider. One such expense that often gets overlooked, especially by new business owners, is void business rates. These rates can significantly impact a business’s bottom line, so it’s crucial to understand what they are and how they can affect your business.
void business rates refer to the rates that business owners must pay on commercial properties that are unoccupied for a certain period. The idea behind void business rates is to prevent property owners from leaving their premises empty and, in turn, encourage them to find tenants or buyers for their properties. However, for business owners, void business rates can be a significant financial burden, especially during times when the property remains unoccupied for an extended period.
Void business rates are payable on commercial properties that have been empty for three months or more. The rates are set at the same level as the standard business rates that would be payable if the property were occupied. This means that while your property sits empty, you will still be required to pay the same amount in rates as if your business were operational.
For new business owners or those who are looking to expand or relocate their business, void business rates can be a real shock. It’s essential to plan for these rates when budgeting for your business, as they can quickly eat into your revenue. However, there are some exceptions and reliefs available that can help mitigate the impact of void business rates.
One of the most common reliefs available to business owners is the small business rate relief. This relief is typically available to businesses that operate from a single property with a rateable value of less than £15,000. If you qualify for this relief, you may be able to receive a discount on your void business rates, making them more manageable for your business.
Another option for businesses struggling with void business rates is to apply for an empty property relief. This relief is available for commercial properties that have been empty for three months or more. Depending on the circumstances, you may be entitled to a full exemption from void business rates for a certain period. However, it’s essential to keep in mind that the rules for empty property relief can be complex, so it’s advisable to seek advice from a professional to ensure that you are eligible for this relief.
For businesses that are struggling to pay their void business rates, there are options available to help ease the financial burden. Some local authorities offer payment plans or discounts for businesses that are experiencing financial difficulties. It’s important to reach out to your local authority to discuss your situation and see if there are any arrangements that can be made to help you manage your void business rates.
In some cases, it may be more cost-effective for a business owner to consider subletting or sharing their commercial property to reduce the void business rates payable. By finding a tenant or sharing the space with another business, you can help cover the costs of the rates while also potentially generating additional income for your business. However, it’s crucial to ensure that any subletting or sharing arrangements are compliant with your lease agreement and local regulations.
Ultimately, void business rates are an essential consideration for all business owners who operate from commercial properties. Understanding how these rates work and the options available for relief can help you manage your finances more effectively and avoid any surprises when it comes to budgeting for your business. By planning ahead and exploring all available options, you can navigate the challenges of void business rates and ensure the long-term success of your business.