business rates empty property exemption
Business rates, also known as non-domestic rates, are taxes that businesses must pay on the properties they occupy. However, there are certain cases where a property may be exempt from paying these rates. One such exemption is the empty property exemption, which allows businesses to avoid paying business rates on properties that are unoccupied. In this article, we will explore the ins and outs of the business rates empty property exemption and how businesses can take advantage of it.
Business rates are a significant expense for many businesses, and they can add up quickly. In some cases, businesses may find themselves paying rates on properties that are not being used, either because they are undergoing renovations or because they are simply vacant. This is where the empty property exemption comes in. Under this exemption, businesses are not required to pay business rates on properties that are unoccupied for a certain period of time.
The length of time that a property can be exempt from business rates under the empty property exemption varies depending on the location. In England, for example, properties are exempt for the first three months that they are empty. After this initial period, most properties are eligible for a further 100% exemption for an additional three months. This means that businesses can potentially avoid paying business rates on empty properties for up to six months.
In Scotland, on the other hand, the empty property exemption is more generous. Properties are exempt from business rates for the first three months that they are empty, and they are then eligible for a further three months of 10% relief. This relief continues to decrease by 10% every three months until it reaches 10% of the full rate. This means that businesses in Scotland can potentially avoid paying business rates on empty properties for much longer than their counterparts in England.
It’s important to note that the empty property exemption only applies to properties that are genuinely unoccupied. If a property is being used for any purpose, even if it is just for storage, it is not eligible for the exemption. Additionally, properties that are undergoing renovations or repairs may be eligible for a separate exemption known as the unoccupied property exemption. This exemption allows businesses to avoid paying business rates on properties that are undergoing major works for a certain period of time.
While the empty property exemption can provide businesses with some much-needed relief from business rates, it is also important for businesses to consider the wider implications of leaving a property empty. Empty properties can be subject to vandalism, squatters, and deterioration, all of which can have a negative impact on the property’s value. In some cases, it may be more cost-effective for businesses to rent out a property at a reduced rate rather than leaving it empty and risking damage.
In conclusion, the business rates empty property exemption can be a useful tool for businesses looking to save money on their rates bills. By taking advantage of this exemption, businesses can avoid paying business rates on properties that are unoccupied for a certain period of time. However, it’s important for businesses to weigh the pros and cons of leaving a property empty and to consider the potential risks of doing so. Ultimately, the empty property exemption provides businesses with a valuable opportunity to reduce their rates bills, but it should be used judiciously and in conjunction with a broader property strategy.