When it comes to owning vacant commercial property, one of the biggest expenses that landlords face is business rates. These rates are a tax on non-residential properties that are used for business purposes, and they can add up to a substantial amount of money each year. However, there are ways to avoid paying business rates on empty property, and in this article, we will explore some strategies that landlords can use to minimize their tax liability.
1. Use the Small Business Rates Relief Scheme
One way to reduce the amount of business rates that you have to pay on empty property is to take advantage of the Small Business Rates Relief scheme. This scheme is designed to help small business owners who occupy commercial properties with a rateable value of less than £15,000. If your property falls under this threshold and is empty, you may be eligible for a discount on your business rates.
2. Claim Exemption for Listed Buildings
If your empty property is a listed building, you may be able to claim an exemption from paying business rates. Listed buildings are properties that have been deemed to have special architectural or historical significance, and as such, they are often granted certain tax breaks. To claim an exemption for your listed building, you will need to provide evidence of its status to the local council.
3. Apply for Temporary Exemption
In some cases, landlords may be able to apply for a temporary exemption from paying business rates on empty property. This exemption is usually granted for a period of three or six months, during which time the property is undergoing repairs or renovations. To qualify for a temporary exemption, you will need to provide evidence that the property is being actively worked on, such as receipts for building materials or contracts with construction companies.
4. Utilize the Empty Property Relief Scheme
Another strategy for avoiding business rates on empty property is to take advantage of the Empty Property Relief scheme. This scheme allows landlords to claim a 100% discount on their business rates for a period of three or six months, depending on the type of property. To qualify for this relief, the property must have been empty for at least three months, and the owner must be actively seeking to rent or sell it.
5. Explore the Business Rates Transitional Relief Scheme
If your empty property has recently undergone a change in rateable value, you may be able to benefit from the Business Rates Transitional Relief scheme. This scheme is designed to help property owners manage the impact of sudden changes in their business rates bills, such as when a property becomes empty. By applying for transitional relief, you may be able to spread the increase in rates over a number of years, reducing the financial strain on your business.
6. Consider Short-term Letting
One creative way to avoid paying business rates on empty property is to consider short-term letting. By renting out your property on a temporary basis, even for a short period of time, you may be able to qualify for the Small Business Rates Relief scheme or other tax breaks. This can help to offset the costs of owning a vacant property while generating some income in the meantime.
In conclusion, there are several strategies that landlords can use to avoid paying business rates on empty property. By taking advantage of tax relief schemes, exemptions, and temporary arrangements, property owners can reduce their tax liability and minimize the financial burden of owning vacant commercial properties. By exploring these options and working closely with the local council, landlords can find ways to save money and protect their bottom line.