Usually, businesses have to pay a form of commercial council tax called business rates. However, some businesses can get such rates reduced or removed completely. This process is called business rates relief.

What Is Business Rates Relief?

Business rates are a charge linked to a commercial property, payable by the business that owns it.

Since the charge directly relates to the property, this means rates are still payable by a new owner. So, if your business sells a property, you are no longer liable to pay those business rates — the buck automatically stops with the new owner.

Therefore, businesses without a physical property — like remote companies or companies that legally operate from a person’s home — may qualify for payment but can usually claim this sum back as an allowable expense. Since business rates are situational, your liability to pay will depend on your individual case and the space you use.

Most non-domestic properties automatically qualify for business rates.

The affordability of business rates usually links to the value of the property and its monthly rent. If a property is high-value and expensive to rent each month, there’s a good chance your business rates will follow suit.

This loose principle allows business owners to evaluate the affordability of commercial property before they sign a lease. If you want to assess the affordability of a property, visit the Valuation Office Agency (VOA) for an accurate commercial valuation.

You may be able to apply for a discount via your local council if your property falls into one of the exempt building categories. Very occasionally, this sum is removed before you receive your bill. In most cases, you’ll need to raise the question and put in an application for business rates relief.

Which Types of Buildings Are Exempt?

The vast majority of non-domestic buildings are not exempt from business rates.

Those that are exempt appear on the list as a result of their sector, community benefit and ultimate business use.

According to GOV.uk, exempt buildings include:

  • agricultural land and buildings, including fish farms
  • buildings used for training or welfare of disabled people
  • buildings registered for public worship or church halls

There are also circumstantial discounts, including:

Sometimes the government will grant short-term relief or more generous relief for businesses impacted by a nationwide situation. For example, grant funding and extra business rate relief have been made available for businesses during the COVID-19 pandemic. Coronavirus-related financial support is a short-term scheme, whereas the other forms of relief mentioned are always available.

The only other type of consistent relief is empty property relief.

Business Rates and Empty Property

All businesses are entitled to business rates relief if a property has been empty for three months. This is simply called empty building relief.

The government introduced this measure in April 2008 in a bid to make unused properties more attractive to prospective buyers. It promotes the efficient use of land and property, meaning there are less vacant warehouses, offices and shops across the country.

Most businesses will get a 100% reduction for three months. However, empty industrial and warehouse properties could still receive benefits for a further three months of vacancy due to difficulty in demand. In total, these types of empty properties will be exempt from business rates relief for a total of six months.

Here are some other examples of properties eligible for extended empty building relief:

  • Unoccupied listed buildings
  • Unoccupied buildings valued below £2,900
  • Charity-owned properties
  • Buildings that can’t be reoccupied by law
  • Properties undergoing major structural renovations

You may also be able to claim a reduction in rates if your property is partly occupied. For example, if half of your property is unoccupied due to renovation, there’s a good chance you’ll be eligible for a business rates discount.

To apply for empty building relief, you’ll need to get in touch with your local council. It will collect some information from you, such as the date when the property was first unoccupied and also arrange a site viewing to confirm the building is indeed empty.

Empty property relief will make your business costs more affordable in the short-term. But be aware that vacant properties can attract unwanted attention. For this reason, it’s always a good idea to invest in vacant property services to prevent any costs incurred as a result of damage or even legal fees to remove squatters.

Secure your empty property with vacant property security. We provide industry-leading security systems to all types of businesses in a bid to keep properties safe and secure while keeping owners free from additional costs.