How to Avoid Business Rates on an Empty Property in the UK
In England, if you use a property commercially, you will likely have to pay business rates based on what the property is used for, and how often it is occupied. If the property is empty for an extended period of time, you will have to do something to avoid paying business rates on it. You can re-classify the property, change the use, or defer the payment, but you’ll need a good reason for doing so. Below we have looked at the best options for how to avoid business rates on an empty property.
Short-term Solutions
According to the Gov.uk website, if your property has become empty, for the first three months business rates do not apply. After this period business rates will return in full, however, there are some circumstances to extend this period.
Extended business rates relief
Properties that are entitled to extended vacant property relief:
- Industrial premises (for example warehouses) are exempt for a further 3 months
- Listed buildings – until they’re reoccupied
- Buildings with a rateable value under £2,900 – until they’re reoccupied
- Properties owned by charities – only if the property’s next use will be mostly for charitable purposes
- Community amateur sports clubs buildings – only if the next use will be mostly as a sports club
Low rateable value
If your property is valued at or below £2,900, business rates will not apply until it is reoccupied.
Defer your business rates
A short-term solution to avoid paying such costly business rates on an empty property is to try to defer the payment. This is a process that allows you to pay your business rates in instalments over a period of up to 12 months. You will normally have to pay a fee, and you must have a plan in place to pay the business rates in full within a set period of time. You will however have to have a good reason for deferring the payment. For example, if the property is undergoing renovation work and is unoccupied as a result, or if it’s unoccupied because of unforeseen circumstances beyond your control.
Long-term solutions
Re-classification
If the property is empty for an extended period of time and there is no chance of it being used for business for a significant period, you can apply for a change in the use. This will re-classify the property as non-commercial and make it eligible for low business rates or even free of business rates altogether. You must submit a written request to the council to ask for the rates to be re-assessed.
Charitable Occupation
Properties that are owned by or used for charitable organisations and community workspaces on a monthly basis can qualify for business rates relief up to 100%. If you are a property owner with a vacant building for a long duration, considering charitable occupation can be a highly cost-effective solution that will not only benefit your savings, but the local community too.
Live-in Property Guardians
A larger commitment perhaps, but one of the most effective methods for avoiding business rates on an empty property, that we specialise in here at LOWE is to have a trusted property guardian occupying your premises. When a property is partly occupied, the owner may apply to the Valuation Office Agency to change the rateable value to reflect the partially occupied property. Our property guardian scheme can provide you with a range of vetted guardians to fit any property type.
Property Types that may be Exempt from Business Rates
According to Gov.uk – the following property types may be exempt from business rates:
- Agricultural land and buildings, including fish farms
- Buildings used for training or welfare of disabled people
- Buildings registered for public religious worship or church halls
How to Avoid Business Rates on an Empty Property with LOWE
Here at The LOWE Group, we have years of experience helping our clients with business rate mitigation schemes to save you money on your empty property. From charitable occupation, workspace occupation to live-in property guardians, we pride ourselves on finding the best solution to meet your requirements, having saved our clients up to £300,000 a year with our vacant property management services.
For more information on our services and how we can best help you, get in touch with a member of our team today.