commercial property empty rates relief, also known as commercial property rate relief, is a tax relief scheme introduced by the UK government to help businesses that have vacant commercial properties. Empty rates relief is designed to ease the financial burden that businesses face when their properties are empty, and they are still required to pay business rates.
Business rates are a tax on non-domestic properties that businesses are required to pay to the local council. The amount of business rates payable is based on the rateable value of the property – which is determined by the Valuation Office Agency (VOA). However, when a commercial property becomes empty, businesses are still liable to pay business rates, even though they are not generating any income from the property.
This is where empty rates relief comes in. Empty rates relief provides businesses with a temporary reprieve from paying business rates on their empty commercial properties. The relief is meant to help businesses that are experiencing financial difficulties or are struggling to find tenants for their empty properties.
There are different types of empty rates relief available to businesses, depending on the circumstances of the property and the business. The most common type of empty rates relief is known as the “empty property rate relief.” This relief provides businesses with a 100% exemption from paying business rates on their empty commercial properties for a limited period of time.
The duration of the empty property rate relief varies depending on the property’s rateable value and location. In England, businesses with properties with a rateable value of less than £2,900 are granted a 100% exemption from paying business rates for as long as the property remains empty. For properties with a rateable value between £2,900 and £12,000, the relief period is extended to three months.
In Scotland, businesses are granted a 50% exemption from paying business rates on their empty commercial properties for the first three months. After that, they are required to pay the full amount of business rates. However, businesses can apply for further relief if they can prove that their properties are actively being marketed for rent or sale.
In Wales, businesses with properties that have a rateable value of less than £2,000 are granted 100% relief from paying business rates for as long as the property remains empty. For properties with a rateable value between £2,000 and £12,000, the relief period is three months.
Aside from the empty property rate relief, businesses may also qualify for other types of empty rates relief, such as the charitable relief for properties owned by charities, the small business rates relief for properties with a rateable value of less than £51,000, or the rural rate relief for properties located in rural areas.
It is important for businesses to be aware of their eligibility for empty rates relief and to apply for the relief as soon as their commercial properties become empty. Failure to apply for empty rates relief can result in significant financial penalties, as businesses will still be required to pay the full amount of business rates on their empty properties.
To apply for empty rates relief, businesses are required to contact their local council and provide evidence of their eligibility for the relief. This may include proof of ownership of the property, evidence of efforts to market the property for rent or sale, and any other relevant documentation requested by the council.
In conclusion, commercial property empty rates relief is a valuable tax relief scheme that can help businesses reduce their financial burden when they have vacant commercial properties. By taking advantage of empty rates relief, businesses can save money on their business rates and alleviate some of the financial pressures associated with owning and managing commercial properties. It is important for businesses to be aware of their eligibility for empty rates relief and to apply for the relief as soon as their properties become empty to avoid unnecessary financial penalties.