Empty rate solutions: Opportunities to reduce the business rate on an empty property

If you are currently holding any vacant commercial property where your initial period of relief has been eroded or you are aware that you will be faced with an empty rate liability soon, it is important that you plan for this and maximise any savings available to you. Although there is no one-size-fits-all solution there are strategies that could reduce your liability. Here are just some of the opportunities open to you if you are faced with an empty rate liability.

Short term occupation

Under the current Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008, once a retail or office property has been physically vacated, a three-month exemption (six months for warehouses/factories) will be afforded to the property owner.

We can employ a strategy which involves the short term occupation of a property for the statutory period and vacating again in order to claim a further three or six month exemption. The process can be repeated. Not all of the property needs to be occupied and no lease or license is required, thus avoiding complications with third party occupations.

This is accepted as legitimate by billing authorities having been tested in the High Court. The strategy can provide savings between 65% and 75% annually if managed efficiently.

New Premises

For newly constructed buildings, even those that are incomplete, a billing authority may serve on its owner a completion notice for rating purposes. The notice must specify a date within three months from service at which time, in the billing authority’s opinion, the property would be complete and ready for occupation.

Billing authorities notoriously issue incorrect notices but, if such a notice is received, seek advice promptly to ensure that any action needed to protect your interests can be executed at the earliest opportunity. The period in which to make an appeal against a completion notice is within 28 days of the date of issue.

Redevelopment works

It is possible to remove an assessment from the rating list if it is subject to building/ redevelopment works. It is important to take advice prior to redevelopments commencing so that the process can be managed, and the assessments deleted from the rating list at the earliest opportunity. It is also important to consider when and how a property should be reinstated in the rating list to ensure savings are maximised.

Disrepair / prohibition in law

If you are holding a property that is in significant disrepair it may be possible to remove the assessment from the rating list on the basis that it would be uneconomic for a landlord to repair the property in order for occupation to take place. In addition to disrepair, there may be a prohibition in law due to repairs required which would fall outside the economic test. If the property was deemed unsafe and therefore unlawful to lease the billing authority may be compelled to allow an exemption.

At Cluttons we advise upon all rating matters and specialise in the provision of Empty Rates Advice. We can advise upon the entire process from start to finish.

For further information please contact Ryan Jones.

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