One of the many challenges faced by businesses, both large and small, is the burden of paying business rates on empty properties. In the UK, business rates are charged on most non-domestic properties, including empty ones. This can place a significant financial strain on companies, especially during times of economic uncertainty or when properties remain vacant for extended periods.
Business rates are a tax that is charged on most non-domestic properties, such as shops, offices, warehouses, and factories. The rates are typically based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The local council then uses this rateable value to calculate the amount of business rates that need to be paid.
For businesses that are struggling financially or have had to close their doors temporarily, paying business rates on empty properties can add to their financial woes. This is because, in most cases, the rateable value of the property remains the same even if it is unoccupied. This means that businesses are still required to pay the full amount of business rates, even if they are not generating any income from the property.
The issue of paying business rates on empty properties has become particularly relevant in recent times due to the impact of the COVID-19 pandemic. Many businesses have been forced to close their doors temporarily or permanently as a result of lockdown restrictions and a decrease in consumer spending. This has left many commercial properties sitting empty, while businesses continue to be liable for paying business rates on these unused spaces.
In response to the challenges faced by businesses during the pandemic, the government introduced a temporary relief scheme for certain businesses that were struggling to pay their business rates. This included a 100% relief on business rates for retail, hospitality, and leisure businesses for the 2020-2021 financial year. However, this relief was only temporary and did not address the issue of paying business rates on empty properties for businesses outside of these sectors.
The impact of paying business rates on empty properties is not limited to businesses that have been directly affected by the pandemic. Even before COVID-19, businesses across all sectors have faced challenges in paying business rates on empty properties. This is particularly true for businesses that operate in industries with high rates of turnover or where properties are difficult to lease or sell.
One of the arguments against paying business rates on empty properties is that it can discourage businesses from investing in and developing vacant properties. If businesses are required to pay full business rates on properties that are not generating any income, they may be less inclined to take on the risk of refurbishing or redeveloping these spaces. This can lead to an increase in the number of empty properties and contribute to urban blight in certain areas.
Another concern is that businesses that are struggling financially may be forced to close their doors permanently if they are unable to afford the cost of paying business rates on empty properties. This not only has negative implications for the business itself but can also have wider economic consequences, such as job losses and a decrease in property values in the surrounding area.
Despite the challenges posed by paying business rates on empty properties, there are some options available to businesses that may help to alleviate the financial burden. For example, businesses may be eligible for certain relief schemes or exemptions, depending on the circumstances of their property and their financial situation. It is important for businesses to explore these options and seek advice from their local council or a professional advisor to determine what support is available to them.
In conclusion, paying business rates on empty properties can place a significant financial strain on businesses of all sizes and sectors. This issue has become particularly relevant in light of the COVID-19 pandemic, which has left many commercial properties sitting empty as businesses struggle to survive. It is important for businesses to explore all available options for relief and support to help alleviate the burden of paying business rates on empty properties.