When it comes to running a business, there are a plethora of expenses that business owners have to account for. From rent and utilities to employee salaries and inventory costs, the list of expenses can seem never-ending. One expense that many business owners may not be as familiar with is void business rates.
void business rates refer to the rates that are charged on commercial properties that are empty or unoccupied for a certain period of time. These rates are charged by the local council and are meant to discourage property owners from leaving their commercial spaces vacant for extended periods. In this article, we’ll dive deeper into void business rates, how they are calculated, and what business owners can do to mitigate these costs.
void business rates are typically charged on commercial properties that have been empty for a period of three months or more. The rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the annual market rent that the property could be let for on the open market.
The exact amount of void business rates that a property owner will have to pay will depend on the rateable value of the property and the specific rules and regulations set by the local council. Generally, void business rates are set at the same rate as normal business rates, but some councils may offer discounts or exemptions for certain types of properties or businesses.
One common misconception about void business rates is that they only apply to properties that are vacant due to financial difficulties or a struggling business. In reality, void business rates can apply to any commercial property that is unoccupied for an extended period, regardless of the reason for the vacancy. This means that even if a business owner is in the process of renovating or relocating their business, they may still be liable to pay void business rates.
Mitigating void business rates can be a challenge for many business owners, especially during times of economic uncertainty or when the property market is slow. However, there are a few strategies that business owners can consider to help reduce these costs. One option is to apply for a temporary exemption or relief from void business rates. Some councils offer exemptions for newly built properties that are not yet occupied, as well as properties that are undergoing major renovations or repairs. By applying for these exemptions, business owners may be able to reduce or eliminate void business rates for a certain period of time.
Another option for mitigating void business rates is to explore the possibility of leasing or subletting the vacant property. By finding a tenant to occupy the space, business owners can avoid having to pay void business rates altogether. However, it’s important to keep in mind that leasing or subletting a property may come with its own set of challenges and expenses, so business owners should carefully weigh the pros and cons before pursuing this option.
In some cases, business owners may also consider negotiating with the local council to reduce the void business rates on their property. This can be a complex process, as councils have strict guidelines and regulations in place for granting rate reductions. However, in certain circumstances, councils may be willing to work with property owners to find a compromise that is mutually beneficial.
Overall, void business rates can be a significant financial burden for business owners, especially in challenging economic times. By understanding how void business rates are calculated and exploring various strategies for mitigating these costs, business owners can take proactive steps to minimize the impact on their bottom line. Whether it’s applying for exemptions, leasing out the property, or negotiating with the council, there are options available to help businesses navigate the challenges of void business rates.