The Government has released their summary of responses following the consultation into Business Rates Avoidance and Evasion conducted in July 2023. The most notable outcome of this consultation is the extension of the Empty Property Relief (EPR) reset period from six weeks to thirteen weeks. These changes will come into effect on 1 April 2024.
EPR allows owners of empty non-domestic properties to benefit from 100% relief from business rates for the first three months (or six months for industrial properties) after the property becomes empty. Once this period ends, the owner becomes liable to pay the property’s business rates.
The reset period is the minimum period of occupation required for another period of EPR to apply. Currently, a property needs to be occupied for six weeks to benefit from further relief under the EPR.
The effect of this change is that a property must be occupied for a minimum of thirteen weeks before it can benefit from a further three-month empty property relief for offices and retail or six months of empty property relief for industrial units.
One of our associates, Rachel Payne, who works in our business rates team, said: “The current legislation allowed for a reset of business rates relief if the property was occupied for six weeks which meant that the landlord would then receive three months relief.
“This process could be repeated as many times as needed until they found a long-term tenant which typically provided a 65% reduction in business rates, With the changes from 1 April it means that more rates will be paid meaning only a 50% reduction for landlords moving forward.“For landlords, this would be a great opportunity to consider commencing a full refurbishment scheme if a lengthy void period is envisaged. Depending on the level of refurbishment, the assessment could be reduced to a nominal amount or deleted from the Rating List altogether, potentially saving you thousands of pounds.”
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