Empty car parking spaces can be a nuisance for many business owners, especially when they are unused and not generating any revenue. However, what some business owners may not realize is that even empty car parking spaces are subject to business rates. Understanding how these rates are calculated and how they can impact your bottom line is crucial for maximizing revenue and avoiding unnecessary expenses.
Business rates are taxes that are charged on most non-domestic properties, including commercial properties, offices, shops, and warehouses. This also includes car parking spaces that are used for business purposes. The rateable value of a property is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Service in Northern Ireland. The rateable value is based on the property’s open market rental value as of a specific date.
When it comes to empty car parking spaces, the rateable value is calculated based on the potential income that could be generated from those spaces. This means that even if your parking spaces are sitting empty, you are still liable to pay business rates on them. The logic behind this is that the unused parking spaces still have a value, and the property owner should be taxed accordingly.
However, there are ways that business owners can minimize the impact of empty car parking spaces business rates on their finances. One option is to apply for an empty property rate relief. This relief can provide a 100% exemption on business rates for certain empty properties, including vacant car parking spaces. In England, the exemption period is until the property is reoccupied, while in Scotland and Wales, the exemption period varies. It is important to check with your local council to see if you are eligible for this relief and how to apply for it.
Another option is to consider leasing out your empty car parking spaces to other businesses or individuals. By renting out your parking spaces, you can generate income that can help offset the business rates you are required to pay. This can be a win-win situation for both parties, as the renter gets a convenient place to park their vehicle, and you earn additional revenue.
It is also important to keep in mind that business rates are not set in stone. The rateable value of a property can be appealed if you believe it is incorrect. For empty car parking spaces, it is especially important to ensure that the rateable value accurately reflects the value of the spaces when they are in use. If you believe that the rateable value is too high because the spaces are frequently empty, you can challenge this valuation and potentially lower your business rates.
In some cases, business owners may consider redesigning their car parking spaces to make them more attractive to potential renters. This could include adding amenities such as charging stations for electric vehicles, security cameras, or lighting to make the spaces more appealing. By investing in these upgrades, you may be able to increase the occupancy rate of your parking spaces and ultimately generate more revenue.
Overall, it is important for business owners to be aware of the implications of empty car parking spaces on their business rates. By understanding how these rates are calculated and exploring options for relief or revenue generation, business owners can minimize the financial impact of vacant parking spaces on their bottom line. Whether it is applying for empty property rate relief, leasing out the spaces, appealing the rateable value, or investing in upgrades, there are various strategies that can help maximize revenue and make the most of your car parking spaces.