When it comes to running a business, there are a myriad of expenses that business owners need to contend with. From payroll to rent to utilities, the costs of operating a business can quickly add up. One expense that many business owners often overlook or are unaware of is void business rates. Also referred to as empty property rates, void business rates are a cost that can impact businesses that own or lease commercial property. In this article, we will delve into what void business rates are, how they are calculated, and what steps businesses can take to mitigate their impact.
What Are void business rates?
Void business rates are essentially a tax that is levied on commercial properties that are unoccupied for an extended period of time. These rates are separate from regular business rates, which are paid by businesses that are actively operating within a commercial property. The purpose of void business rates is to discourage property owners from leaving their properties vacant for extended periods of time and to generate revenue for local governments.
How Are void business rates Calculated?
Void business rates are typically calculated based on the rateable value of the property in question. The rateable value is determined by the Valuation Office Agency (VOA) and is used as the basis for calculating both regular business rates and void business rates. The exact formula for calculating void business rates can vary depending on the local authority, but in general, the rates are typically a percentage of the rateable value of the property.
It is worth noting that there are certain exemptions and reliefs available for void business rates. For example, properties that are undergoing major renovation or repair work may be eligible for relief from void business rates for a certain period of time. It is important for property owners to familiarize themselves with the specific rules and regulations regarding void business rates in their local area to ensure that they are not overpaying.
Mitigating the Impact of void business rates
Given the potential financial impact of void business rates, it is crucial for business owners to take proactive steps to mitigate their impact. One option for property owners is to explore potential exemptions and reliefs that may be available to them. For example, properties that are classified as small businesses may be eligible for relief from void business rates under certain circumstances. Property owners should also consider seeking professional advice from a tax advisor or property consultant to explore all available options for reducing void business rates.
Another option for businesses is to consider alternative uses for their vacant property in order to generate income and avoid void business rates altogether. For example, property owners could explore renting out the space on a temporary basis to pop-up shops or other businesses in need of short-term space. Alternatively, property owners could consider converting the space into residential units or office space in order to attract new tenants and generate rental income.
In addition to exploring exemptions and alternative uses for vacant properties, businesses can also take steps to minimize the amount of time that their property remains empty in order to avoid incurring void business rates. This may involve actively marketing the property, pricing it competitively, and working with an experienced real estate agent to attract potential tenants. By taking proactive steps to fill vacant properties quickly, businesses can reduce their exposure to void business rates and ensure that their properties remain profitable.
In conclusion, void business rates are an important consideration for businesses that own or lease commercial property. By understanding what void business rates are, how they are calculated, and how to mitigate their impact, businesses can take proactive steps to ensure that they are not overpaying on this often overlooked expense. By exploring exemptions, alternative uses for vacant properties, and strategies for minimizing vacancy periods, businesses can navigate the world of void business rates with confidence and protect their bottom line.