Tax & Accounting News

“Loopholes” To Save On Empty Business Rates

13/05/2009

Exploiting knowledge of the tax system can save businesses thousands of pounds if they have empty premises.

Legal loopholes – and a bit of ingenuity – can be used to save money following changes to business rates.

Business owners can drastically reduce their costs by taking advantage of the relatively-new empty business rates.

If premises are occupied under a commercial arrangement and they are subsequently vacated, which means that a nil rate period comes into force.

During the year up to 50 per cent of the normal occupational charge can be claimed in nil rates rather than the full empty rates for the year.

But you do have to take some steps to comply with the rules.

In order to claim, the premises must be legitimately used for short periods for six weeks, for example as storage, and then vacated, in order to claim.

From April this year owners of vacant business premises with a rateable value of less than £15,000 are exempt from paying business rates for one year.

Real savings can be made where the premises can easily and cost effectively divided into smaller units worth less than £15,000. Owners must apply for an alteration to the Rating List, but often the move can prove its worth, reducing bills to zero.

And most importantly, keep your papers in order. The new Business Rates Valuation List, which is set to come into force on 1st April 2010, is to be based on values at April 2008, so if you have carried out transactions on your property around that time then keep a note.

It may help you in potential appeals against the new assessment.

 

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