FSB Concerned Over Empty Property Tax for Small Businesses
The government’s plan to lower the threshold of empty property rates could mean disaster for some small businesses.
A change in the exemption for paying empty property rates could hit small businesses across England, if the government’s plan to reduce the threshold in April is approved.
The current exemption, which was introduced in 2009, means that any business with an empty property in England with a rateable value of ┬ú18,000 or less did not have to pay business rates.
However the government is planning to reduce this threshold to just ┬ú2,600 in April, and the FSB believes that this will affect many small businesses that own property, especially as many are already struggling financially.
The concerns come at a time when private sector firms and small businesses are being encouraged to pick up the slack from looming public sector job cuts.
According to Startups.co.uk, Roger Culcheth, local government policy chairman at the FSB, said:
“The government has said that small businesses have a vital role in driving economic growth and getting the recovery on a firm footing, yet for some businesses this additional tax could tip the balance and force them into insolvency.”
It is expected that the government will not re-introduce the ability for SMEs to claim Small Business Rate Relief on the property, nor the 50% relief previously on offer. The costs associated with paying the empty property tax will, in some cases, be more than if the company were running their business out of the property.
There is widespread concern that some property owners will simply not be able to rent or sell their empty property, due to the current economic climate, and may be crippled by the rate of tax.
“The result of this cut in the threshold without restoring the 50% relief will make small business owners worse off than they were prior to the 2009 change and significantly more so than they were in 2009 and 2010,” added Mr Culcheth. “We urge the government to look closely at this matter and, at the very least, allow the businesses to claim Small Business Rate Relief.”
Commercial property owners with empty office space could consider converting part of their building into serviced office use or meeting room hire. Serviced offices can be advertised on the officebroker.com website free of charge, and space can be rented on a standard commission fee basis.
Find out more about renting your serviced office space through officebroker.com in our Office Space Providers section, or by calling our dedicated Marketing team on 0870 112 3667 (option 2).