Who pays business rates: tenant or landlord?

Who pays business rates: tenant or landlord?

Business rates are a form of tax that most businesses in the UK are required to pay. The question of who is responsible for paying these rates, whether it falls on the tenant or the landlord, is a common source of confusion among business owners. The answer to the question of who pays business rates ultimately depends on the terms of the lease agreement between the tenant and the landlord.

In general, the responsibility for paying business rates falls on the occupier of the commercial property. This means that if a business occupies a property, they are usually the ones who are required to pay the business rates. However, there are instances where the landlord may be liable for paying business rates instead.

Landlords are typically responsible for paying business rates in the following scenarios:
– The property is empty and the landlord is actively seeking a new tenant.
– The property is being used for a business that is exempt from paying business rates.
– The lease agreement explicitly states that the landlord is responsible for paying business rates.

It is important for both tenants and landlords to understand their obligations regarding business rates to avoid any misunderstandings or disputes.

FAQs:

1. What are business rates?

Business rates are taxes paid by businesses in the UK that are based on the value of the commercial property they occupy.

2. Can business rates be included in the rent?

Yes, in some lease agreements, the cost of business rates may be included in the rental payments made by the tenant to the landlord.

3. Can business rates be reduced or exempted?

Some businesses may qualify for exemptions or reductions in their business rates, such as small businesses or those occupying certain types of properties.

4. How are business rates calculated?

Business rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency in England and Wales, or the Assessor in Scotland.

5. What happens if a business fails to pay its business rates?

Failure to pay business rates can lead to penalties, legal action, and in some cases, even seizure of assets.

6. Can I dispute the rateable value of my property?

Yes, businesses have the right to appeal the rateable value of their property if they believe it is incorrect.

7. What should I do if I am unsure about who is responsible for paying business rates?

If you are unsure about your obligations regarding business rates, it is best to consult with a legal advisor or a chartered surveyor.

8. Can I negotiate the terms of business rates with my landlord?

Yes, tenants can negotiate the terms of their lease agreement with their landlord, including who is responsible for paying the business rates.

9. How often are business rates payable?

Business rates are usually payable on a quarterly basis, but this may vary depending on the terms of the lease agreement.

10. Can business rates be transferred to a new tenant?

If a new tenant moves into a commercial property, they are usually responsible for paying the business rates from the date of their occupation.

11. Can business rates be paid online?

Yes, most local authorities offer online payment options for businesses to pay their business rates.

12. Are there any exemptions for certain types of businesses?

Yes, some businesses may qualify for exemptions or reductions in their business rates, such as those in rural areas or those classified as charitable organizations.

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