Business rates can be a significant cost for many commercial property owners in the UK. Finding ways to lower these rates is essential for improving the financial bottom line of businesses. In this article, we will explore some of the best tips for reducing business rates on commercial properties in the UK. By implementing these strategies, property owners can potentially save a substantial amount of money and make their investments more profitable.
Understanding the Business Rates System in the UK
Before delving into the tips for lowering business rates, it is crucial to have a basic understanding of how the business rates system works in the UK. Business rates are taxes that businesses pay on non-domestic properties, including shops, offices, and warehouses. The rates are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the local council in Wales. The business rates are used to fund local services and are set by the government.
Review and Challenge the Rateable Value
One effective way to lower business rates is to review and potentially challenge the rateable value of the property. The rateable value is based on the estimated rental value of the property as of a certain date. If you believe that the rateable value assigned to your property is too high, you can request a reassessment from the VOA or the relevant authority. Providing evidence of lower rental values or property conditions can support your challenge and potentially result in a reduced rateable value.
Take Advantage of Rate Relief Schemes
The next tip for lowering business rates is to take advantage of rate relief schemes that may be available to you. Different types of relief schemes exist to help businesses reduce their rates burden. For example, small businesses may be eligible for Small Business Rate Relief, which can provide a discount on their rates. Empty property relief, charitable relief, and rural rate relief are other schemes that property owners can explore to lower their business rates liability.
Optimize Property Usage
Another way to reduce business rates is to optimize the usage of the property. Vacant or unutilized spaces can still attract business rates, so it is in the best interest of property owners to make the most of their premises. Consider subletting unused space, offering short-term leases, or diversifying the property usage to generate additional income streams. By maximizing the property’s occupancy and revenue-generating potential, you can offset the impact of high business rates.
Invest in Energy Efficiency Measures
Investing in energy-efficient upgrades and sustainability measures can also help lower business rates. Some local authorities offer discounts or incentives for properties that meet certain energy efficiency standards. Installing energy-saving equipment, improving insulation, and using renewable energy sources can not only reduce operating costs but also lead to potential rate reductions. By demonstrating a commitment to sustainability, property owners may qualify for green business rates relief or other incentives.
Negotiate with the Valuation Office Agency
Lastly, property owners can consider negotiating with the VOA or the relevant authority to reach a mutually beneficial agreement on the rateable value. Building a strong case supported by relevant data and expert advice can strengthen your position during negotiations. Working closely with professional advisors, such as surveyors or rating specialists, can help you navigate the complexities of the negotiation process and potentially secure a lower rateable value for your property.
In conclusion, lowering business rates on commercial properties in the UK requires a multifaceted approach that involves understanding the system, exploring relief schemes, optimizing property usage, investing in energy efficiency, and negotiating effectively. By implementing these best tips, property owners can mitigate the financial impact of business rates and create a more favorable environment for their businesses.