Business rates are a necessary evil for most commercial property owners. They are a tax levied by local authorities on non-residential properties, including shops, offices, and warehouses. The amount of business rates you pay is based on the rateable value of your property, which is set by the government’s Valuation Office Agency.
However, when it comes to empty listed buildings, the rules around business rates can become even more complex. Listed buildings are properties that have been identified as having special architectural or historic interest. As such, they are protected by law from alterations or demolition without permission.
In the UK, listed buildings are divided into three categories – Grade I, Grade II*, and Grade II. Grade I buildings are of exceptional interest, Grade II* are particularly important buildings of more than special interest, and Grade II buildings are of special interest.
But what does this mean for business rates on empty listed buildings? Well, empty properties, whether they are listed or not, can be subject to business rates. However, listed buildings are often exempt from paying business rates for a certain period of time.
In England and Wales, if a property is unoccupied and undergoing major renovation works, then it may be exempt from paying business rates for a period of 12 months. This is known as the empty property rate relief. However, listed buildings are often granted an extended period of exemption from business rates.
For Grade II listed buildings, owners can apply for exemption from paying business rates for up to 18 months. Grade II* listed buildings can receive a 24-month exemption, while Grade I listed buildings can qualify for a full 36-month exemption. This extended period of relief is designed to incentivize owners to properly maintain and restore these important historical buildings.
But what happens once this period of exemption expires? Owners of empty listed buildings need to be prepared for the potential financial burden of paying business rates. The rateable value of a property can have a significant impact on the amount of business rates owed. This is calculated using a formula that takes into account the property’s rental value, physical attributes, and local rental market.
It’s important for owners of empty listed buildings to factor in the cost of business rates when considering their renovation or restoration plans. Failure to pay business rates on time can result in hefty fines and legal action from the local council.
There are, however, some options available to owners of empty listed buildings who are struggling to pay their business rates. They can apply for hardship relief, which is a discretionary scheme that allows local authorities to reduce or waive business rates in cases of financial hardship.
Owners can also apply for charitable relief if the building is being used for charitable purposes. Charitable relief can provide up to 80% relief on business rates for non-domestic buildings that are wholly or mainly used for charitable purposes.
Another option for owners of empty listed buildings is the Community Amateur Sports Club (CASC) relief. This relief is available for properties used by amateur sports clubs that meet certain criteria. CASC relief can provide up to 80% off business rates for properties that are used by qualifying sports clubs.
Navigating the complex world of business rates on empty listed buildings can be challenging, but understanding the rules and regulations can help owners make informed decisions about their properties. Whether you are renovating a Grade II listed building or restoring a Grade I listed masterpiece, it’s important to be aware of the potential costs and exemptions associated with business rates.
In conclusion, business rates on empty listed buildings can be a complex and sometimes costly affair. Owners need to be aware of the rules and regulations surrounding exemptions and relief schemes to avoid any financial penalties. Proper planning and budgeting can help owners manage the costs associated with business rates and ensure the long-term preservation of these important historical buildings.