January 2010 – Business Rate Relief of Empty Properties Extended

The commercial property sector was given a boost the Chancellors Pre-Budget Report of December 2009 as it was announced that the relief from empty business property rates would be extended for another 12 months.

Properties with a Rateable Value of below £18,000 will be exempt from paying tax on vacant commercial properties from 2010/11. For the year 2009/10 empty properties with a Rateable Value of less than £15,000 were exempt.

The Government estimate that the move will mean that that 70% of commercial property would have relief from property rates.

The draft Rateable Values for 2010 are now available on the VOA website, but appeals cannot be lodged on the 2010 assessment until after 1 April 2010.

Clients with empty properties with Rateable Values in excess of £18,000 should consider whether the assessment could be split into two or more separate assessments. Where two or more assessments can be created of less than £18,000 Rateable Value no business rates will be paid. If the 2005 assessment is split the Valuation Office will split the 2010 assessment now. This should be actioned as soon as possible.

Clients who occupy ore space than they now need should consider physically splitting the accommodation into two or more parts. If a vacant area (/areas) can be created with a Rateable Value up to £18,000 no rates will be paid on the vacant section.

Clients with vacant properties which cannot be split, but where the Rateable Value is marginally over £18,000 should consider lodging Appeals to bring the Rateable Value below £18,000. This should be made as soon as possible after 1 April 2010.

For advice on mitigating business rates please speak to David Johnson or Andrew Tucker.