When it comes to owning and operating a business, there are many costs and expenses to consider. One of the most significant expenses for businesses that operate out of listed buildings is business rates. Business rates are taxes that are levied on non-domestic properties in the UK, including shops, offices, warehouses, and other commercial properties. Listed buildings are subject to business rates just like any other commercial property, but there are some unique considerations that owners of listed buildings need to be aware of.
Listed buildings are properties that are considered to have special architectural or historic significance and are protected by law from being demolished or significantly altered. There are three categories of listed buildings in the UK: Grade I, Grade II*, and Grade II. Grade I buildings are of exceptional interest, Grade II* buildings are particularly important buildings of more than special interest, and Grade II buildings are of special interest.
Listed buildings are subject to special regulations and restrictions in order to preserve their historical and architectural value. This includes restrictions on what alterations and improvements can be made to the building. While owning a listed building can be a source of pride and add value to a business, it also comes with additional costs and responsibilities, including business rates.
Business rates are calculated based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of the property as of a specific date. In the case of listed buildings, the rateable value may be lower than it would be for a non-listed property of similar size and location due to the restrictions on alterations and improvements that can be made to the building.
However, listed buildings are still subject to business rates and owners are responsible for paying them. The exact amount of business rates that a listed building owner will have to pay depends on the rateable value of the property and the multiplier set by the government. The multiplier is a percentage rate that is applied to the rateable value to determine the amount of rates that are due.
In addition to the standard business rates, owners of listed buildings may also be eligible for relief or exemptions from paying business rates. One common form of relief is the Listed Building Allowance, which provides a 100% reduction in business rates for buildings that are either Grade I or Grade II* listed and are used for a qualifying purpose, such as a charity or not-for-profit organization.
Owners of listed buildings may also be eligible for small business rate relief if the rateable value of the property is below a certain threshold. This relief provides a discount on the business rates that are due, with the exact amount of the discount depending on the rateable value of the property.
It is important for owners of listed buildings to be aware of their obligations when it comes to paying business rates. Failure to pay business rates on a listed building can result in penalties and legal action by the local council. In some cases, the council may even take possession of the property in order to recover the unpaid rates.
Overall, business rates on listed buildings can be a complex and costly issue for owners to navigate. However, with careful planning and research, owners can take advantage of available reliefs and exemptions to minimize their business rates liability. By understanding the impact of business rates on listed buildings and taking proactive steps to manage this expense, owners can ensure that their business remains profitable and compliant with the law.