Empty shops can be found on almost every high street in the UK, with many struggling businesses forced to close their doors due to rising costs and changing consumer habits. One of the main expenses that these empty shops continue to face even after closure is business rates.
Business rates are a tax that is charged on most non-domestic properties, including shops, offices, and warehouses. They are based on the rateable value of the property, which is set by the Valuation Office Agency (VOA) and revalued every few years. The rateable value is then multiplied by the current business rates multiplier to calculate the annual bill.
For businesses that are still operating, business rates are a necessary expense that contributes to local services such as roads, schools, and waste collection. However, for empty shops, business rates can be a significant burden that adds to the financial strain of already struggling businesses.
One of the main issues with business rates on empty shops is that they can deter potential investors and tenants from taking over the property. Landlords are still required to pay business rates on empty properties after a set period of three months for commercial properties, creating a financial disincentive for them to keep the property vacant.
This can lead to a high turnover of vacant properties on the high street, creating an eyesore that can deter customers and drive down footfall in the area. Additionally, empty shops can become a magnet for antisocial behavior, vandalism, and squatting, further devaluing the area and making it less attractive for businesses and shoppers.
Furthermore, the current business rates system does not take into account the economic conditions of the area or the individual circumstances of the property. This means that even in areas where demand is low and property values are falling, landlords are still required to pay business rates at the same level as in more affluent areas.
The impact of business rates on empty shops is not only felt by landlords and property owners but also by the wider community. Local authorities rely on business rates as a source of income to fund vital services, so the presence of empty shops can have a negative impact on the overall economic health of the area.
There have been calls for reform of the business rates system to address these issues and create a fairer system for empty shops. One suggestion is to introduce a sliding scale of business rates for empty properties, where the rate payable decreases over time to incentivize landlords to find new tenants or investors.
Another option is to offer business rates relief for empty properties in certain circumstances, such as those undergoing refurbishment or in areas of economic deprivation. This would help to reduce the financial burden on landlords and encourage them to invest in the property to bring it back into use.
Some local authorities have already taken steps to address the issue of empty shops by offering discretionary relief on business rates for vacant properties. This provides a temporary reprieve for landlords while they search for new tenants and helps to prevent properties from falling into disrepair.
However, more needs to be done at a national level to reform the business rates system and create a more supportive environment for empty shops. By addressing the financial barriers that landlords face, we can help to revitalize our high streets and create thriving communities where businesses can flourish.
In conclusion, business rates on empty shops can be a significant barrier to revitalizing our high streets and creating vibrant communities. By reforming the business rates system and offering targeted relief for vacant properties, we can encourage landlords to invest in their properties and bring them back into use. This will not only benefit landlords but also the wider community by creating more attractive and economically viable areas for businesses and shoppers.