Empty Rates Advice

Eddisons are in a unique position to devise a bespoke strategy to mitigate your rating liability through several means including intermittent occupation, charitable occupation, occupation prohibited by law and when properties are subject to refurbishment or an incomplete build leading to not being capable of beneficial occupation.

We work closely with our clients to formulate the right solution for an Empty Property Rates Strategy and we will build up a profile of the client’s intentions for the buildings and the characteristics of the building itself. There is not a ‘one size fits all’ answer to EPR and from our experience it often includes several different strategies that need to be employed to maximise client savings.

New Empty Property Rates Legislation was introduced as at 1st April 2008 and we see this as an unfair tax and a burden on owners, occupiers, developers and landlords who now face additional property costs for any property interests that are partly or wholly vacant.

Vacant factories and warehouses are entitled to 100% relief for the first six months with shops and offices entitled to 100% rating relief for the first three months only and subject to full rates thereafter.

After the initial three or six month rate free period expires, empty property is liable for 100% of the basic occupied business rate unless:-

1. From 1 April 2011, the rateable value of the property is less than £2,600. This rateable value limit was much higher in 2009/10 (£15,000) and 2010/11 (£18,000) because the government increased it in these years to help businesses during the recession.  From April 2011 it goes back to a much lower figure of £2,600. This means that from April, smaller premises are liable for the 100% business rate charge.
2. The owner is prohibited by law from occupying the property or allowing it to be occupied.
3. The property is kept vacant because of action taken by or on behalf of the Crown, or any other local or public authority, to prohibit occupation of the premises or acquisition of them. 
4. The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979.
5. The property is the subject of a building preservation notice within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990 or is included in a list compiled under section 1 of that Act.
6. The owner is entitled to possession only in his capacity as the personal representative of a deceased person.
7. The company is in administration or liquidation.

Empty Property?

We are working with a UK Registered Charity that is able to occupy empty properties by way of a 12 month tenancy (subject to the landlord’s right to determine on 7 days notice). The Charity installs Bluetooth transmitters in vacant buildings in order to broadcast their community based messages. Whilst in occupation the Charity will be liable for 20% of the rates payable and they will make this payment direct to the Local Authority. The Charity charges a fee equivalent to 45% of the full rates payable during the period of their occupation which is paid pro rata, monthly in advance. In effect this fee breaks down into 20% to cover the rates payable and 25% to cover the cost of the occupation. Therefore during the period of the occupation, the Landlords liability will be limited to 45% of the rates payable.

Eddisons fee basis for organising and advising on the profile of the occupation and assisting with the determination is based upon the percentage of net rates payable saved resulting from the implementation of the scheme.

This scheme is by far the most ‘corporately responsible’ model being used in the market at this time and has the added benefit that it would be unaffected should the Government decide to invoke the anti-avoidance measures contained within the Rating (Empty Properties Act) 2007.

For an informal discussion about an appeal of your business rates or empty property relief, please contact John Hayward, Head of Rating on 0161 831 9444 or email him at john.hayward@eddisons.com