Empty shops have become a common sight in towns and cities across the UK. The decline of the high street, along with the rise of online shopping, has contributed to this phenomenon. However, businesses that are struggling to survive are not only facing the challenge of attracting customers but are also burdened with high business rates on these empty properties.
Business rates are a form of tax that is charged on most non-domestic properties, including shops, offices, and warehouses. The amount of business rates payable is based on the rateable value of the property, which is determined by the Valuation Office Agency. In England, the business rate multiplier is set by the government and is used to calculate the final bill.
One of the main issues with business rates on empty shops is that businesses are still required to pay the full amount even if their property is vacant. This means that struggling businesses are faced with an additional financial burden that they can ill afford. Some businesses have even had to close down as a result of the high business rates on their empty properties.
The situation is further exacerbated by the fact that business rates are based on the rateable value of the property, which may not reflect its actual rental value. This means that businesses may be paying more in business rates than they would if the property was rented out at market value. This creates a disincentive for businesses to invest in their properties and bring them back into use.
Furthermore, the current system of business rates does not take into account the economic conditions in a particular area. This means that businesses in struggling areas are unfairly penalized with high business rates on their empty properties, further adding to their financial woes. This is particularly concerning given the current economic climate and the challenges that businesses are facing in the wake of the COVID-19 pandemic.
In response to these concerns, there have been calls for reform of the business rates system, particularly in relation to empty properties. One proposal is to introduce a temporary exemption or discount on business rates for empty shops to provide some relief to struggling businesses. This would help to incentivize businesses to bring their properties back into use and contribute to the regeneration of the high street.
Another suggestion is to link business rates to the actual rental value of the property, rather than the rateable value. This would ensure that businesses are only paying what they can afford based on the income generated from the property. It would also provide a more transparent and fair system of taxation for businesses.
Local authorities also have a role to play in supporting businesses with high business rates on empty properties. They can work with businesses to explore options for reducing their business rates bill, such as applying for business rate relief or negotiating a payment plan. They can also provide support and guidance to businesses looking to bring their properties back into use, such as access to funding or advice on planning and development.
In conclusion, the impact of business rates on empty shops is a significant issue that is affecting businesses across the UK. Struggling businesses are burdened with high business rates on their empty properties, which can further compound their financial difficulties. There is a need for reform of the business rates system to provide relief to businesses and support the regeneration of the high street. By introducing measures such as temporary exemptions or linking business rates to actual rental value, businesses can be given the support they need to survive and thrive in challenging economic times.