CHANGES TO THE RATES LIABILITY OF EMPTY PROPERTIES

From 1 April 2008 changes were made to how empty properties in the Rating List were charged business rates under the 'Rating (Empty Properties) Act 2007'. Empty commercial property was liable for full business rates after an initial rate-free period of three months, or six months for factories and warehouses. However, there were some exemptions including listed buildings and small properties with rateable values below a certain threshold as follows:

Financial Year Rateable Threshold

2008/09 £2,200
2009/10 £15,000
2010/11 £18,000
2011 to 2015 £2,600
(2015 -The date of the next revaluation)

IMPORTANT NOTE - Those ratepayers who had been granted an exemption because the rateable value of their property was between £2,600 and £18,000 no longer receive it after 1st April 2011. They will be issued with a bill for 100% of the charge. Those ratepayers, who have already had a proportion of the three/six month, rate-free period on 1 April 2011, will continue to receive the balance of the relief, for up to the three/six months in total.

Example:
Ratepayers who have already had a proportion of the three month rate-free period on 1 April 2011 will continue to receive the balance of the relief, for up to three months. If the exemption is applied as at 15 January 2011 it will cease on 14 April 2011. Likewise ratepayers who have already had a proportion of the six month rate-free period on 1 April 2011 will continue to receive the balance of the relief, for up to six months.

An industrial property which qualifies for a six month exemption is defined as any property other than retail which is constructed or adapted for use for one or more of the following purposes:

• the manufacture, repair, or adaptation of goods or materials
• the subjection of goods or materials to any process
• storage
• the working or processing of minerals
• the generation of electricity
  

WHO IS LIABLE FOR PAYING THE BUSINESS RATES ON EMPTY PROPERTIES

The liability for paying empty property rates rests with the person or company entitled to possession. This could be the tenant or leaseholder (if there continues to be a valid tenancy or lease) or the owner of the property.

For example if a person (company) has a three year lease on a property and decides to vacate the property after 18 months, they will be liable for paying the empty rates, after the exemption period of three or six months has expired Business Rates will continue to be paid until the lease ends or the landlord agrees to withdraw the lease.

Some properties do not attract empty property rates and are exempt from payment during the time that they are empty. The full list can be found by clicking here but the main exemptions are properties with a rateable value of under £2,600, those that are listed buildings, or held for charitable purposes.

APPEALS

The changes in rates liability arising from the reforms to empty property relief are not in themselves grounds for appeal. However, if you disagree with the rateable value that appears in the current rating list entry for your property, under the existing arrangements you may challenge it by making a 'proposal' against it to the Valuation Office Agency (VOA). Your rights of appeal are not affected by the reforms to empty property relief and you can contact the VOA for further information regarding the making of appeals.

If your property is not capable of beneficial occupation - for instance, if it is in poor condition and cannot be economically repaired the VOA may judge that it should be taken out of the rating list altogether. However, please be aware that if the state of your property is damaged for the purposes of avoiding rates, under anti-avoidance legislation introduced by the Government the VOA is required to disregard the change in the property's state when assessing its rateable value. So for instance, if the roof is removed from an empty property for the purpose of avoiding rates, it may be valued as if the roof had not been removed.

Please contact the VOA at the following address:
34 Southway
Colchester
Essex
CO2 7BB
Telephone: 03000 505 900