Business rates are a necessary evil for many businesses, but they can be particularly burdensome for shop owners, especially those with empty properties. Empty shops, while often seen as a blight on the high street, actually face higher business rates than occupied shops. This can create a vicious cycle, where high rates contribute to shops remaining empty, which in turn leads to even higher rates. In this article, we explore the impact of business rates on empty shops and what can be done to alleviate this burden.
Business rates are a tax levied on most non-domestic properties, including shops, offices, and warehouses. The rates are calculated based on the rental value of the property, so empty shops still have to pay business rates despite not generating any income. In England, the rateable value of a property is assessed by the Valuation Office Agency (VOA) and multiplied by the national non-domestic multiplier to determine the actual amount due in rates.
One of the main issues facing empty shops is the higher rate of business rates they are required to pay. In England, empty retail premises with a rateable value of over £51,000 are required to pay 100% of the business rates, while smaller properties receive a discount. This means that larger empty shops face a significant financial burden, which can hinder efforts to bring the property back into use.
The high business rates on empty shops can also act as a disincentive for landlords and property owners to invest in refurbishing or repurposing their properties. The costs of renovation and improvements are already high, and adding the additional burden of business rates can make it financially unfeasible for property owners to bring the property back into use. This leads to a growing number of empty shops, which further exacerbates the decline of high streets.
The impact of business rates on empty shops is not just limited to the property owners; it also affects the wider community. Empty shops can lead to a decline in footfall, which in turn affects the viability of other businesses in the area. High streets with a large number of empty shops can become ghost towns, with little to attract shoppers and visitors. This can have a detrimental effect on the local economy, leading to job losses and a decrease in property values.
So, what can be done to alleviate the burden of business rates on empty shops? One solution is for the government to reform the business rates system to make it fairer for all businesses. This could include introducing a relief scheme for empty properties, reducing the rates payable on vacant shops, or revaluating properties more frequently to reflect their actual rental value.
Another option is for local authorities to offer incentives to property owners to bring their empty shops back into use. This could include grants or tax breaks for landlords who invest in refurbishing their properties or offering discounted rates for a set period after the property is let. Such incentives could help to stimulate investment in empty shops and rejuvenate struggling high streets.
In conclusion, the impact of business rates on empty shops is a significant issue that needs to be addressed. High rates can act as a barrier to bringing empty properties back into use, leading to a decline in high streets and local economies. Reforming the business rates system and offering incentives to property owners are potential solutions to alleviating this burden and revitalizing empty shops. By working together, businesses, property owners, and local authorities can help to breathe new life into our high streets and create vibrant, thriving communities.