When it comes to running a business, there are numerous expenses that must be considered in order to ensure smooth operations and continued success. From employee salaries to utility bills, there are countless costs that business owners need to factor into their budget. One expense that is often overlooked, however, is void business rates.
What exactly are void business rates, and why should business owners be aware of them? In this article, we will explore the concept of void business rates, how they are calculated, and what business owners can do to minimize their impact on their bottom line.
void business rates refer to the rates that a business must pay on a commercial property that is empty or unoccupied. In essence, business rates are a form of property tax that must be paid by businesses that occupy a non-domestic property. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA).
When a commercial property becomes vacant, the business that previously occupied the space is still liable for paying business rates until the property is reoccupied. This can pose a significant financial burden for businesses, especially small businesses that may be struggling to make ends meet.
So, how are void business rates calculated? The rateable value of a non-domestic property is determined by the VOA based on factors such as the size and location of the property. Business rates are then calculated by multiplying the rateable value of the property by the multiplier set by the government.
In the past, businesses were granted a three-month exemption from paying business rates on a vacant property. However, as of April 1, 2008, the government introduced changes to the rules governing void business rates. Under the new regulations, businesses are no longer entitled to the three-month exemption, and they must now pay business rates on a vacant property from the day it becomes empty.
This change has had a significant impact on businesses, particularly those that may be struggling financially. In some cases, businesses have been forced to close their doors due to the financial burden of paying void business rates on a property that is not generating any income.
So, what can business owners do to minimize the impact of void business rates on their bottom line? One option is to seek relief through the government’s Small Business Rate Relief scheme. This scheme provides relief for businesses that occupy a property with a rateable value below a certain threshold. By applying for this relief, businesses may be able to reduce the amount of business rates they are required to pay.
Another option is to negotiate with the local council to see if any discretionary relief is available. Some councils may offer relief to businesses that are experiencing financial hardship or that are actively seeking to reoccupy their vacant property.
In addition, business owners can take steps to minimize the amount of time that their property remains vacant. By actively marketing the property and working to find a new tenant as quickly as possible, businesses can reduce the amount of time that they are required to pay void business rates.
Overall, void business rates can pose a significant financial burden for businesses that have vacant properties. By understanding how these rates are calculated and exploring options for relief, business owners can minimize the impact of void business rates on their bottom line. By taking proactive steps to reoccupy their property and seeking relief where possible, businesses can ensure that they are not unnecessarily burdened by void business rates.