Understanding Void Business Rates: What You Need To Know

If you own a commercial property, you may already be familiar with the term “business rates”. However, you may not be as familiar with the concept of void business rates. void business rates refer to the rates that are still payable on a property that is empty or “void” of occupation.

In the world of commercial real estate, void periods are an inevitable part of doing business. Whether a property is undergoing refurbishment, waiting for a new tenant, or simply vacant for other reasons, there are times when a commercial property does not generate rental income. During these void periods, property owners are still required to pay business rates, which can put a strain on their finances.

Business rates are a tax imposed on non-domestic properties in the UK. The amount of business rates payable is based on the rateable value of the property, which is determined by the Valuation Office Agency. The rates are set by the government and are used to fund local services such as schools, roads, and waste collection.

One of the challenges with void business rates is that they can add up quickly, especially for properties that are empty for an extended period of time. For property owners, this can create a financial burden that makes it harder to sustain their investment. In some cases, property owners may even be forced to sell their property to avoid the mounting costs of void business rates.

There are, however, some ways that property owners can mitigate the impact of void business rates. One option is to apply for an exemption or relief on the business rates for the empty property. This may be possible if the property is undergoing major repairs or structural changes, or if it is classified as a listed building.

Another option is to negotiate with the local council to have the property revalued at a lower rateable value. This can help reduce the amount of business rates that are payable during the void period. It is important to keep in mind that the council has the final say on any adjustments to the rateable value, so it is essential to provide evidence to support your request.

Some property owners may also consider leasing the property on a short-term basis to generate rental income during the void period. While this can help offset the costs of void business rates, it is important to weigh the potential benefits against the risks of taking on a temporary tenant.

In recent years, there has been a growing call for reform of the business rates system in the UK. Critics argue that the current system is outdated and unfair, particularly for small businesses and property owners facing void periods. The government has taken steps to address these concerns, including implementing measures to provide relief for certain businesses affected by the COVID-19 pandemic.

Despite these efforts, void business rates continue to be a significant issue for property owners in the UK. It is important for property owners to be aware of their obligations and explore all available options for managing void periods. By staying informed and proactive, property owners can navigate the challenges of void business rates and protect their investment in commercial property.