Understanding Void Business Rates: What You Need To Know

When it comes to running a business, there are numerous expenses to consider. From overhead costs to employee wages, maintaining a successful operation requires careful financial planning. However, one cost that often catches business owners off guard is void business rates.

Void business rates refer to the charges levied on commercial properties that are unoccupied for an extended period of time. These rates are intended to encourage property owners to keep their spaces occupied, thereby stimulating economic activity and preventing urban blight. While the intention behind void business rates is clear, many business owners are left wondering how they are calculated and how they can be mitigated.

Calculating void business rates
The calculation of void business rates is based on the rateable value of the property in question. This value is determined by the Valuation Office Agency (VOA), which assesses the property’s rental value. Once the rateable value is established, the property owner is responsible for paying business rates based on this figure.

When a property becomes vacant, the owner is typically given a period of time during which they are exempt from paying business rates. This period, known as the empty property rate relief period, varies depending on the type of property and its location. Once the relief period expires, however, void business rates come into effect.

Mitigating void business rates
There are several strategies that property owners can employ to minimize the impact of void business rates. One common approach is to actively market the property for rent or sale in order to secure a tenant as quickly as possible. By keeping the property occupied, owners can avoid incurring void business rates altogether.

In cases where finding a tenant proves challenging, property owners may consider applying for exemptions or reliefs. Some local authorities offer schemes that provide relief on void business rates for certain types of properties, such as charitable organizations or industrial sites. By exploring these options, owners may be able to significantly reduce their financial burden.

Another tactic used by some property owners is to negotiate with their local council to lower the rateable value of the property. By demonstrating that the property is not generating income due to market conditions or other factors, owners may be able to reduce the amount they owe in void business rates.

The Impact of void business rates
While void business rates are intended to incentivize property owners to keep their spaces occupied, they can have unintended consequences for businesses that are struggling to stay afloat. In some cases, the burden of void business rates can exacerbate financial difficulties and force owners to make difficult decisions about the future of their businesses.

Furthermore, void business rates can discourage property owners from investing in much-needed renovations or improvements to their properties. If a property is not generating income due to market conditions or other factors, owners may be reluctant to incur additional expenses in the form of void business rates.

Moving Forward
In light of the challenges posed by void business rates, it is essential for property owners to carefully consider their options and develop a strategy for managing this expense. By staying informed about the calculation of void business rates, exploring potential exemptions and reliefs, and actively marketing their properties, owners can minimize the impact of void business rates on their bottom line.

Ultimately, void business rates are a necessary cost of doing business for property owners. By taking proactive steps to address this expense, owners can ensure that their properties remain viable and continue to contribute to the economic vitality of their communities.