Commercial Property Owners And Charities Working Hand In Hand

Business rates have become a major problem for owners of commercial property. Before buying a commercial property there a many things that must be considered, business rates should be a main consideration.

Business Rates are basically, a tax on non domestic property and were first administered, in order to fund the Poor Law of 1572.

Each commercial property in Britain has its own rateable value, established by it size and location. The billing and collection of business rates are the responsibility of local authorities.

You may be thinking this all seems very fair? Well, this is the point where business rates get very tricky and in some cases, very unfair.

In 2008, the government removed any rate relief on empty properties, meaning that if a property was standing empty or undergoing refurbishment, rates would still have to be paid by the owner. In many, if not all of these cases, the landlord would not be receiving any income from the premises. Now you see how things are becoming very unfair.

There was some assistance for commercial property owners though. Previously, if a premises had a rateable value of less than £18000, it would be exempt from paying business rates. But, as of 1^st April 2011, this metaphorical rug, was pulled from under the feet of commercial property owners and the rateable value for relief was downgraded to £2800.

To help give an idea, a property with a rateable value of £2800, is not much bigger than a toilet area.

So, are there any ways around such extortion for commercial property owners?

Charities are the one exemption to the rule when it comes down to it. It is charities and only charities, whom are able to gain 100 percent rate relief. It is now not unheard of, for commercial property owners to be seeking out a charity and licensing their empty building out to the charity for the sum of £1 a month.

The empty premises could have been costing the commercial property owner up to and above £100,000.00 a year, in empty property rates. But, as the charity is now licensee for the property, full rate relief will be given.

In return the commercial property owner would offer a charitable donation, which would be a lot less than the amount required to cover the business rates. Nonetheless, this amount would be invaluable to the charity.

 

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