As a business owner, you are likely familiar with the concept of business rates, which are taxes that businesses in the UK have to pay on their commercial properties. However, what you may not be as familiar with is the concept of void business rates, which are rates that are charged on 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 the impact on your business.
void business rates are a type of tax that is charged on commercial properties that are empty. This means that if you own a commercial property that is currently vacant, you will still have to pay business rates on that property. The idea behind void business rates is to incentivize property owners to keep their properties occupied and in use, rather than leaving them empty and unused.
void business rates can be a major financial burden for businesses, especially if they have multiple properties that are currently vacant. The rates are calculated based on the rateable value of the property, which is determined by the government’s Valuation Office Agency (VOA). The rateable value is an estimate of the rental value of the property, and void business rates are typically set at 50% of the normal business rates for the first three months that a property is empty. After three months, the rates can increase to the full amount if the property remains vacant.
There are some exemptions to void business rates, such as newly built properties that have not yet been occupied, properties that are undergoing major renovations, and properties that are classified as being exempt from business rates for other reasons. However, these exemptions are limited, and most empty commercial properties will still be subject to void business rates.
So, what can you do as a business owner to minimize the impact of void business rates on your bottom line? Here are a few strategies that you can consider:
1. Negotiate with the local council: In some cases, you may be able to negotiate with the local council to reduce or waive void business rates on your empty property. This could be especially helpful if you can demonstrate that you are actively trying to find a tenant for the property or that you are facing financial hardship.
2. Make your property more attractive to potential tenants: One way to minimize void business rates is to make your property more attractive to potential tenants. This could involve making improvements to the property, offering incentives to prospective tenants, or lowering the rent to make it more competitive in the market.
3. Consider short-term leases: If you are struggling to find a long-term tenant for your property, you may want to consider offering short-term leases to businesses that are looking for temporary space. While this may not eliminate void business rates entirely, it can help to offset some of the costs of keeping the property empty.
4. Keep the property in good condition: Maintaining your empty property in good condition can help to preserve its value and make it more attractive to potential tenants. This could involve regular cleaning, landscaping, and repairs to ensure that the property is in top condition when a tenant is ready to move in.
In conclusion, void business rates can be a significant financial burden for businesses that own empty commercial properties. By understanding how void business rates are calculated and exploring strategies to minimize their impact, you can better manage this aspect of your business finances. Whether you negotiate with the local council, make improvements to your property, offer short-term leases, or simply keep the property well-maintained, there are steps that you can take to help alleviate the costs of void business rates.