business rates relief on empty property, also known as empty property relief, is a government scheme that provides financial assistance to businesses that have vacant commercial properties. This relief is designed to help businesses cope with the financial burden of paying business rates on properties that are not generating any income.
The concept of empty property relief was introduced to incentivize businesses to invest in and reuse vacant spaces. By offering relief on business rates, the government aims to encourage businesses to bring empty properties back into use, which in turn helps to revitalize local economies and create jobs.
Business rates are a tax on non-domestic properties that are used for commercial purposes. The amount of business rates payable is determined by the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). Businesses are required to pay business rates even if their property is empty, unless they qualify for empty property relief.
There are different types of business rates relief on empty property available to businesses, each with its own eligibility criteria and relief period. The most common types of relief include:
1. Empty Property Rate Relief: This relief allows businesses to claim a 100% exemption on business rates for a specified period of time. The relief period varies depending on the type of property and council regulations, but is typically between three and six months for industrial properties and three months for other types of properties.
2. Charitable Rate Relief: Registered charities are entitled to an 80% discount on business rates for properties that are used for charitable purposes. If the property is empty, the charity can apply for an additional 100% relief for up to six months.
3. Small Business Rate Relief: Small businesses that occupy only one property with a rateable value of less than £15,000 may be eligible for small business rate relief. This relief provides a sliding scale of relief, with properties with a rateable value of up to £12,000 receiving 100% relief, and properties with a rateable value between £12,001 and £15,000 receiving tapered relief.
4. Enterprise Zones Relief: Businesses located in designated enterprise zones may be eligible for business rates relief of up to 100% for a specified period of time. This relief is designed to encourage investment and job creation in economically deprived areas.
In addition to the above types of relief, there are also specific exemptions and discounts available for certain types of properties, such as agricultural properties, listed buildings, and properties in rural areas. Businesses should consult with their local council or a qualified tax advisor to determine their eligibility for empty property relief.
It is important for businesses to be aware of the rules and regulations surrounding empty property relief, as there are penalties for non-compliance. Businesses that fail to pay their business rates on time or provide false information to obtain relief may be subject to fines or legal action.
In some cases, businesses may be required to pay full business rates on empty properties if they are found to be deliberately keeping properties vacant to avoid paying rates. This practice, known as rates avoidance, is illegal and can result in heavy penalties.
Overall, business rates relief on empty property is a valuable tool for businesses looking to manage their expenses and invest in vacant spaces. By taking advantage of the various types of relief available, businesses can save money on business rates and contribute to the economic growth of their local communities.
In conclusion, understanding the various types of business rates relief on empty property is essential for businesses looking to minimize their tax liabilities and make the most of their commercial properties. By staying informed and complying with the regulations set forth by the government, businesses can take advantage of the relief available to them and contribute to the growth and prosperity of their local economies.