In certain circumstances business rate relief is available for owners and tenants of commercial property. Business rates are collected by the Local Council to help pay for local services and are charged on most non-domestic properties.
You will need to comply with the relevant criteria as follows and a number of the reliefs are currently only available for a limited period of time:
- 100% relief is available for a continuous period of three months only.
- A change of ownership during the three-month period will not trigger a fresh three-month exemption as the exemption applies to the property, not the person paying the rates.
- A short-term occupation of the property (six weeks or less) by, for example, a tenant or licensee during the three-month period will be ignored. The three-month period and the business rates exemption will continue to run during that period of short-term occupation. This rule prevents owners from gaining additional periods of rates exemptions by establishing a temporary letting.
- If the property is let or occupied for a period of more than six weeks, the rates exemption will end at the start of that period, but when the property becomes vacant again, a new exemption period can be claimed.
Industrial and warehouse property
- 100% relief for a continuous period of six months only.
- Short-term occupation of the property (of six weeks or less) by, for example, a tenant or licensee during the six-month period will be ignored.
Other exempt properties
- Properties whose owner is prohibited by law from occupying it or allowing it to be occupied (for example, where there has been a breach of fire safety and a prohibition notice has been served).
- Properties that cannot be occupied due to the action of a public authority (for example, where the property is closed due to a prohibition order for health and safety reasons).
- Listed properties (including property that forms part only of a listed property).
- Empty properties:
- with a rateable value below a certain threshold (£2,600 from 1 April 2011);
- whose owner is entitled to possession in their capacity as trustee under a deed of arrangement;
- owned by individuals subject to a bankruptcy order;
- owned by a company subject to a winding up order; and
- owned by a company in administration. However, an administrator is liable to pay business rates where property is being used (for example, where a company in administration continues to trade from the property).
Small business rate relief
- Where a property is occupied by a small business and it has a rateable value below £18,000 (£25,500 in Greater London), the business may be entitled to a discount of up to 50% on its rates bills.
- Until 31 March 2014, there is full relief for eligible small businesses occupying property with a rateable value of up to £6,000 and tapering relief for businesses with a rateable value of up to £12,000.
Certain property is “zero rated” where the property is empty and the property owner is:
- A charity and it appears that, when the property is re-occupied, it will be wholly or mainly used for charitable purposes (whether of that charity or that of other charities).
- A community amateur sports club (CASC), where it appears that when the property is re-occupied, it will be wholly or mainly used for the purposes of that CASC (or for the purposes of that and another CASC).
Empty properties held by charities or CASCs pending disposal for other purposes will not benefit from zero rating.
- farm buildings and land (excluding buildings used as offices or for other business activities)
- fish farms
- places of public religious worship (except in Scotland – you apply for relief for these buildings instead of being exempt)
- buildings used for training or welfare of disabled people (except in Scotland – you apply for relief for these buildings instead of being exempt
The local council has discretion to grant relief in certain situations.
When a property is partly occupied, the property owner may apply via the local council to the Valuation Office Agency to have the rateable value split to reflect the occupied and unoccupied areas.
For further information and advice on whether your property is eligible for relief you shuld contact your local council
This article is intended for general information purposes only and shall not be deemed to be, or constitute legal advice. Newnham & Jordan Solicitors, in Wimborne Dorset, cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article or any external articles it may refer or link to.