Empty shops on the high street have become a common sight in many towns and cities across the UK. The rise of online shopping and changing consumer trends have led to a decline in footfall on the high street, forcing many retailers to close their doors. However, despite the challenges faced by businesses, they are still required to pay business rates on empty shops. In this article, we will explore the impact of business rates on empty shops and discuss how businesses can navigate this issue.
Business rates are a tax that businesses are required to pay on non-domestic properties, including shops, offices, and warehouses. The amount of business rates a business is required to pay is based on the rateable value of the property, which is set by the Valuation Office Agency. For empty shops, businesses are still required to pay business rates, although they may be eligible for a discount for a certain period of time.
The impact of business rates on empty shops can be significant for businesses, especially small independent retailers. Paying business rates on a property that is not generating any income can put a strain on the financial resources of a business, potentially leading to further financial difficulties and even closure.
Many businesses are calling for reforms to the business rates system to alleviate the burden on empty shops. Some proposals include reducing or scrapping business rates on empty shops, offering more incentives for landlords to bring vacant properties back into use, or introducing a new tax on online retailers to level the playing field between online and offline businesses.
Navigating the impact of business rates on empty shops can be challenging for businesses, but there are some strategies that businesses can use to help mitigate the impact. One option is to apply for an exemption or reduction in business rates for empty properties. Businesses may be eligible for a 100% exemption for the first three or six months the property is empty, depending on the property’s rateable value. After this period, businesses may be eligible for a 50% reduction in business rates for a further three months.
Another option for businesses is to explore other ways to generate income from empty shops while they are vacant. Businesses could consider renting out the property to pop-up shops, artists, or other businesses on a short-term basis. This can help to generate some income from the property while also bringing footfall to the area and potentially attracting new customers to the business.
Businesses could also consider using empty shops for marketing purposes, such as hosting events, workshops, or product launches. This can help to raise awareness of the business and generate interest from potential customers. Businesses could also use empty shops for storage or as a showroom for online sales.
In addition to exploring ways to generate income from empty shops, businesses can also look into other measures to reduce their overall business rates bill. Businesses can apply for small business rate relief if they only have one property and it has a rateable value of less than £15,000. This can help to reduce the amount of business rates payable on the property.
Businesses can also consider appealing their rateable value if they believe it is incorrect or unfair. This can be a complex and time-consuming process, but if successful, it can result in a reduction in business rates payable on the property.
Overall, the impact of business rates on empty shops can be significant for businesses, especially small independent retailers. However, by exploring ways to generate income from empty shops, reducing overall business rates bills, and appealing rateable values, businesses can navigate this issue and help to alleviate the financial burden of paying business rates on empty properties.