Finally, some real Business Rates Relief
The Department for Communities and Local Government stated that the reform of Empty Property Rates (EPR) from 50% to 100% from the 1stApril 2008 was to increase the level of competitiveness in the UK by encouraging the owners of empty property to find ways to better use the premises, either through using it themselves, attracting new tenants or redeveloping the site for a new use.
Despite best intentions, the overall view seems to be negative, resulting in an adverse effect on vacant property for which there is no perceived demand. Apart from a short exemption period, full business rates are payable on all empty commercial and industrial property. Recent data has revealed that the total cost of Empty Property Rates for 2012 was a staggering £1.1 billion. As such the cost of EPR can have devastating effects on landlords and is considered to be crippling the high street, preventing businesses of all types from achieving financial stability.
Its considered that the threat of having to pay rates on empty properties is “discouraging people from putting money into new development or refurbishing existing property, which is undermining the prospects for economic growth.” (Matthew Sinclair, Chief Executive of the Tax Payers Alliance).
In response to this, the Government has introduced a relief from EPR for unoccupied new buildings completed between 1st October 2013 and 30th September 2016, during the first 18 months after construction. Despite being considered as a tentative step in the right direction, the risk for developers remains high unless the relief can be extended to include buildings that had recently been redeveloped or refurbished, as well as newly built properties.
A report released by the RICS (February 2013) suggests that this measure would assist in improving the viability of schemes involving substantial refurbishment. This would help to increase and improve available stock, thereby relieving pressure on rents as and when the economy begins to return to growth. The RICS also recommend that the threshold for Empty Property Relief be increased to between £12,000 and £18,000, thus helping to assist the growth of small business accommodation by removing the risk of holding empty stock, there by encouraging SME’s to expand.
For more information or advice on reducing your business rates, please do not hesitate to contact us on 01634 265900 or email us at Info@harrisons-surveyors.com