business rates on empty shops, also known as “vacant property rates”, can have a significant financial impact on businesses that are struggling to stay afloat. With the rise of online shopping and changing consumer habits, many high streets across the country are dotted with empty storefronts, each one potentially being hit with hefty business rates bills. In this article, we will explore the reasons behind the imposition of business rates on empty shops and discuss ways in which businesses can manage this financial burden.
Business rates are a form of tax that is levied on commercial properties in the UK. The rates are calculated based on the rateable value of the property, which is determined by the government’s Valuation Office Agency (VOA). Historically, empty commercial properties were exempt from paying business rates for the first three months. However, in recent years, the government has introduced changes to the rules surrounding business rates on empty properties in an effort to encourage property owners to make use of vacant spaces and revitalize high streets.
One of the primary reasons behind the imposition of business rates on empty shops is to deter property owners from leaving properties vacant for extended periods of time. Empty shops not only detract from the vibrancy of a high street but also have a negative impact on surrounding businesses, leading to a decrease in footfall and potential loss of revenue. By levying business rates on empty shops, the government aims to incentivize property owners to either rent out their properties or make productive use of the space.
However, the imposition of business rates on empty shops can pose a significant financial burden on businesses that are already struggling to make ends meet. For businesses that have been forced to close due to external factors such as the COVID-19 pandemic or changing consumer habits, the ongoing business rates bills on empty properties can further exacerbate their financial difficulties. In some cases, businesses may be faced with the difficult decision of whether to continue paying business rates on an empty shop or risk legal action from the local council.
There are, however, ways in which businesses can manage the impact of business rates on empty shops. One option is to apply for “hardship relief” from the local council. Hardship relief is a form of discretionary relief that is granted to businesses that are facing financial hardship and are struggling to pay their business rates. Property owners can make a case to the local council outlining their financial circumstances and providing evidence of their inability to pay the full business rates bill. If successful, the council may grant hardship relief, reducing the amount of business rates that the property owner is required to pay.
Another option for businesses facing high business rates bills on empty properties is to explore other uses for the space. Rather than leaving the property vacant, property owners can consider renting out the space for temporary pop-up shops, art exhibitions, or events. By making productive use of the space, property owners can potentially generate additional income while also fulfilling their obligations to pay business rates on the property.
Additionally, property owners can also explore the possibility of appealing the rateable value of the property with the VOA. If the rateable value of the property is deemed to be too high, property owners can submit an appeal to have the value reassessed. A lower rateable value would result in a lower business rates bill, providing some relief to businesses struggling to pay their rates on empty shops.
In conclusion, the imposition of business rates on empty shops can have a significant financial impact on businesses that are already facing challenges. However, by exploring options such as hardship relief, finding alternative uses for empty spaces, and appealing the rateable value of the property, businesses can effectively manage the burden of business rates on empty properties. Ultimately, by finding creative solutions to make productive use of empty shops, businesses can contribute to the revitalization of high streets and support their local communities.