There are a lot of costs that come with running a business, particularly if you need to buy or rent a commercial property to work from. What many start-ups don’t realise is that there are two types of taxes applied to commercial properties including business rates and stamp duty land tax.
Business rates tend to be the most expensive, though the good news is there are ways you can cut the costs. Here you’ll discover how your business could save on commercial property business rates.
What are business rates?
When working out your company’s overheads, you’ll soon find business rates make up around 50% of the yearly rent of the property. The problem here is that business rates can be fairly complex and difficult to understand. Therefore, many business owners miss out on numerous opportunities to reduce the rates they are paying.
How can you reduce your rates?
Due to how complex these taxes are, it’s worth hiring a professional company to help reduce business rates. Appeals tend to be the most common route to go down. That is, appealing against the current rates you are paying if you feel they are too high.
However, one thing to keep in mind here is that not all professional companies that handle these appeals are trustworthy. In 2015, it was revealed that some business rate specialists could actually end up increasing your rates, rather than reduce them.
You could also double check whether your property is exempt from business rates. Certain types of building are exempt, such as agricultural listed buildings.
Finally, for 3 months, you could claim empty property tax relief if your commercial property isn’t currently occupied. In some rare cases this tax relief can be expanded, however it’s worth seeking advice to see if your business is eligible. This type of tax relief would largely apply to businesses just starting up who have only recently moved into the property, or businesses whose premises are being renovated.
It’s also worth noting that business rates are occasionally adjusted to accommodate changes in rental value. The next change to these rates is due to come into force in April 2017. Business owners will be told in October 2016, what rates they can expect to be paying. For those operating in London and other major cities, this could mean their rates suddenly increase dramatically.
So, if you’re looking to save on commercial property business rates, now is the time to start looking into where you can make changes!