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unoccupied business rates, also known as empty property rates, are a source of financial burden for businesses in the UK. These rates are charged by local authorities on commercial properties that are vacant for an extended period of time. The aim of these rates is to incentivize property owners to bring their vacant properties back into use, thus stimulating economic growth and preventing the blight of empty buildings on the local community.
In the UK, business rates are a form of property tax that are levied on most non-domestic properties, including shops, offices, and warehouses. 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 property becomes unoccupied, it may become eligible for relief from business rates for a limited period of time.
The rules regarding unoccupied business rates vary depending on the location of the property. In England, unoccupied commercial properties are subject to a 3-month exemption period, after which full business rates are payable. However, certain types of properties, such as industrial premises, may be eligible for a 6-month exemption period. In Scotland, the exemption period is extended to 6 months for all types of commercial properties. In Wales, the exemption period is also 3 months, but there are additional reliefs available for properties undergoing repair or renovation.
One of the main challenges for businesses facing unoccupied business rates is the financial burden that they impose. In addition to the regular costs of owning a property, such as maintenance and insurance, businesses must also pay business rates on a property that is not generating any income. This can put a strain on businesses, especially small businesses that may be struggling to stay afloat.
To help alleviate this burden, there are several measures that businesses can take to reduce their liability for unoccupied business rates. One option is to apply for empty property relief, which provides a 100% discount on business rates for properties that have been vacant for a certain period of time. This relief is available for the first 3 months in England and Wales, and the first 6 months in Scotland.
Another option is to actively market the property for sale or rent, as this can help to demonstrate that the property is being actively marketed for occupation. This can help to qualify for the 100% empty property relief, as it shows that the property owner is making efforts to bring the property back into use.
Property owners also have the option to apply for hardship relief if they are struggling to pay their business rates due to financial difficulties. This relief is not automatic and is subject to the discretion of the local authority, which will assess the financial circumstances of the property owner before making a decision.
In some cases, property owners may choose to demolish the vacant property in order to avoid paying unoccupied business rates. However, this is not always a viable option, as it may be subject to planning permission and can incur additional costs.
Overall, unoccupied business rates can be a significant financial burden for businesses in the UK. However, by taking advantage of empty property relief and other measures, property owners can reduce their liability and avoid unnecessary costs. It is important for businesses to stay informed about the rules and regulations regarding unoccupied business rates in order to make informed decisions about their properties. By effectively managing unoccupied business rates, businesses can minimize their financial burden and focus on growing their operations.