Needed advice for business rates relief

[KhA]

Hello.

We moved 2 months ago into empty shop and the shop is currently under refurbishment.

I would like to apply for some reliefs such as small relief and retail relief but council said we cannot apply for these reliefs before trading date.

So we tried to apply for empty property relief but the shop has been empty since 2018 so that council said we should pay full amount of the rates.

My question about categorizing ‘occupied’ and ‘unoccupied’ properties is not solved yet.

I was trying to understand why physically occupied property is categorised to ‘unoccupied property’ when doing refurbishment and searched to get more information but found below.

This is from one of the legal case about ‘occupying empty property: business rates.
Wanted to share here but cannot post with the link.

From the legal case, it was found that there are four necessary ingredients that needed to exist to establish rateable occupation. The same natures are found when it comes to occupation of a property for business tax purpose. These are:

• actual occupation
• exclusivity for the possessor's purposes
• possession for some value or benefit to the possessor, and
• occupation that was not transient.

Applying these to my case, the lease agreement proves the legal right of my occupation on the business and the property is physically occupied by my company since the lease start date and the occupation creates the values to the business even when refurbishing.

I believe that I satisfy the conditions for occupation even for the period of refurbishment.

I suppose it will be different when an owner run refurbishment before letting the property as it will be considered that he is running refurbishment of an empty property.

However, in my case, I got a right to occupy the property through the lease agreement and then have physically occupied the property and running refurbishment. It won't be the same as an owner runs refurbishment an empty property. As there’s occupancy happened first in my case.

Unfortunately, I couldn’t find the availability of public access to the business to create some revenue in definition of for rateable occupation/occupancy and this makes me really confused when this nature is applied to classify property as ‘unoccupied’

I acknowledge and appreciate your sympathy and understanding on my frustration about the full amount of business rate bill without application of the relief for almost two months. However, it’s still too harsh for a start-up business to pay a full amount of business rate even when it qualifies for some relief.

Could you please take a look at this so that I could be qualified for available reliefs from the lease start date?

Thank you.

 

[Paul Kelly ICHYB]

There are 2 forms of SBRR:
The standard one is a property with a rateable value of £12,000 or less - no rates OR properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

Introduced recently is something being called 'Retail Rate Relief' - 'occupied hereditaments with a rateable value of less than £51,000, that are wholly or mainly being used as shops, restaurants, cafes and drinking establishments'.

So, it depends on your rateable value - if between £15-51k you will not qualify until you are in. If under £15k you should qualify for the first.

 

[KhA]

Hello.

We moved 2 months ago into empty shop and the shop is currently under refurbishment.

I would like to apply for some reliefs such as small relief and retail relief but council said we cannot apply for these reliefs before trading date.

So we tried to apply for empty property relief but the shop has been empty since 2018 so that council said we should pay full amount of the rates.

My question about categorizing ‘occupied’ and ‘unoccupied’ properties is not solved yet.

I was trying to understand why physically occupied property is categorised to ‘unoccupied property’ when doing refurbishment and searched to get more information but found below.

This is from one of the legal case about ‘occupying empty property: business rates.
Wanted to share here but cannot post with the link.

From the legal case, it was found that there are four necessary ingredients that needed to exist to establish rateable occupation. The same natures are found when it comes to occupation of a property for business tax purpose. These are:

• actual occupation
• exclusivity for the possessor's purposes
• possession for some value or benefit to the possessor, and
• occupation that was not transient.

Applying these to my case, the lease agreement proves the legal right of my occupation on the business and the property is physically occupied by my company since the lease start date and the occupation creates the values to the business even when refurbishing.

I believe that I satisfy the conditions for occupation even for the period of refurbishment.

I suppose it will be different when an owner run refurbishment before letting the property as it will be considered that he is running refurbishment of an empty property.

However, in my case, I got a right to occupy the property through the lease agreement and then have physically occupied the property and running refurbishment. It won't be the same as an owner runs refurbishment an empty property. As there’s occupancy happened first in my case.

Unfortunately, I couldn’t find the availability of public access to the business to create some revenue in definition of for rateable occupation/occupancy and this makes me really confused when this nature is applied to classify property as ‘unoccupied’

I acknowledge and appreciate your sympathy and understanding on my frustration about the full amount of business rate bill without application of the relief for almost two months. However, it’s still too harsh for a start-up business to pay a full amount of business rate even when it qualifies for some relief.

Could you please take a look at this so that I could be qualified for available reliefs from the lease start date?

Thank you.

Th

There are 2 forms of SBRR:
The standard one is a property with a rateable value of £12,000 or less - no rates OR properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

Introduced recently is something being called 'Retail Rate Relief' - 'occupied hereditaments with a rateable value of less than £51,000, that are wholly or mainly being used as shops, restaurants, cafes and drinking establishments'.

So, it depends on your rateable value - if between £15-51k you will not qualify until you are in. If under £15k you should qualify for the first.

 

[KhA]

Thank you for the kind reply.

The shop is currently under refurbishment so council said we cannot get those relief (small and retail relief) before commenced trading date.
Our rateable value is below £15k so we can apply for small and retail relief but they said we should pay full amount of business rate during refurbishment period.

The council is Camden.

For me, it is unfair to pay full before trading even though we have a legal tenancy with the landlord.

I totally cannot understand why physically ‘occupied tenants’ is categorised to ‘unoccupied tenants’ when the shop is under refurbishment.

Is there someone to help this?

 

[Paul Kelly ICHYB]

Not sure what you are trying to say!

BTW 'occupied' is not subjective - you are either in the property or not. Trading is different.

 

[Paul Kelly ICHYB]

Ask Camden to provide the regulation that prevents you from claiming relief?

I think they are trying this on!

For me, it is unfair to pay full before trading even though we have a legal tenancy with the landlord.

- Sadly, fairness does not normally come into these and many other business related issues.

 

[KhA]

Hello.

What I am asking you is...

1. We should not apply for any relief before commenced trading date?

Our contract started 2 months ago from now and the shop has refurbishment for 2 months.

The shop has been empty for around a year and half and the landlord applied for empty relief and got 3 months free business relief.

My question is that we cannot apply for any reliefs if the shop is under refurbishment and not trading period?

It is quite funny that we pay more business rate when we are preparing for trading...

Thank you.




I will ask to Camden council for this!