If you're exploring exploring storage solutions, it's essential to understand the potential for incurring business rates on storage units. If you don't research storage facilities carefully and the current regulations, you may be landed with a surprise bill.
Let's make sure that doesn't happen!
What are business rates?
Business rates are a local tax that applies to most non-domestic or business properties in the UK, such as shops, offices, and warehouses. This tax is an important part of the local economy, funding essential services like public transport, street lighting, and emergency services.
Managed by local councils, business rates are calculated based on the property's "rateable value," which the Valuation Office Agency determines. This system ensures that businesses contribute to the local amenities and services that support their operation and the wider community
Understanding self storage business rates
Unlike domestic storage users, those using units for business purposes can be liable for higher costs. This determination largely depends on how the storage unit is used.
If a unit is utilised for commercial activities—such as storing stock for an online business, as a base for operations, or any activity that goes beyond mere personal storage—it may be classified as a non-domestic property.
The key criteria for whether a self storage or unit is subject to business rates include:
- Is it used for commercial purposes? – Is the unit being used to store goods, materials, furniture storage, or equipment for a business?
- What's the frequency of access? – How often is the unit accessed for business operations? Regular access for business activities could classify it as a business premise.
- Is it modified for business use? – have any modifications been made to the unit to facilitate business operations, such as shelving for stock or an office space setup?
- Is it a business operations base? – is the unit being used as a base for business operations, for example, as a distribution point, or to conduct sales or services?
- Is it an integral part of a business? – Is the storage unit an essential component of the business operations? This could mean it's used for storing inventory, archives packing materials, or equipment without which the business cannot operate.
The Valuation Office Agency (VOA) plays a critical role in this determination, assessing properties to decide if they should be listed on the rating list as business premises. Factors such as whether the storage facility is an integral part of a business, the regularity of access for business operations, and any modifications made to the unit for business use can influence this assessment.
Local councils, guided by evaluations from the VOA, issue business rates bills based on these determinations. Storage unit renters need to understand these criteria and assess their usage against them to anticipate any potential business rates liability
Exemptions and Reliefs
In the UK, certain self storage facilities and units may not be subject to business rates or could be eligible for reduced rates under specific conditions and relief schemes:
Small Business Rate Relief (SBRR)
If your self storage unit has a rateable value of £15,000 or less, and it's the only property your business uses, you might qualify for SBRR. Properties with a rateable value of £12,000 or less are exempt from business rates.
For properties valued between £12,001 and £15,000, relief decreases gradually from 100% to 0%. If you acquire a second property, you can retain relief on your main property for 12 months, under certain conditions.
Exemptions
Some properties are completely exempt from business rates. This includes agricultural land and buildings (unless used for non-agricultural purposes), properties used for the training or welfare of disabled people, and buildings registered for public religious worship or as church halls. The specific use of the property and adherence to legal requirements are crucial for these exemptions.
Business rates relief varies if your property is in Scotland, Wales, or Northern Ireland, with local councils holding the authority to decide eligibility for relief. They also manage the billing and collection of business rates. It's advisable to directly contact your local council to understand the specific reliefs available in your area and to confirm your eligibility.
Additionally, if your self storage unit is affected by severe local disruption, such as flooding or nearby construction, you may qualify for a temporary reduction in business rates. Reporting changes in your circumstances to the council is essential to ensure you're paying the correct amount and to avoid potential backdated charges.
Find out if your storage unit is liable for business rates
To find out if your storage unit is liable for business rates in the UK, follow these steps:
1. Check the use of your self storage unit
Assess how you're using the storage unit. If it's for commercial activities, like storing inventory or equipment for your business, it might be subject to business rates.
2. Consult the Valuation Office Agency (VOA)
The VOA assigns a rateable value to non-domestic properties, including storage units used for business. You can contact the VOA to find out if your storage unit has been assessed for business rates. Their website offers resources and contact details.
3. Contact your local council
Local councils issue business rates bills and handle collections. They can provide specific advice on whether your storage unit is liable for business rates and inform you about any relief schemes you might qualify for. As rates can vary by location, your local council is a crucial resource.
4. Review relief schemes
Before contacting the VOA or your local council, familiarise yourself with various business rates relief schemes on the GOV.UK website. This can help you ask more precise questions.
5. Seek professional advice
If you're unsure about the rateable value of your self storage unit or its liability for business rates, consulting a professional, such as a tax advisor or a solicitor specialising in property law, can offer clarity. They can provide detailed assessments and assist with appeals if needed.
Staying informed and proactive in understanding liabilities associated with your storage unit can help manage your business expenses effectively.
Is container storage and box storage liable for business costs?
Container storage and box storage units may be liable for business costs. However, the responsibility for paying these rates can depend on whether you own the container or are renting it. If the container is rented for your own business, the tax liability typically falls to the owner of the container.
This situation mirrors that of businesses operating out of self-storage containers. On the other hand, if you own the container outright, you would be responsible for the business costs.
For detailed guidance and to explore specific scenarios related to container storage and business rates, we recommend consulting with the Self Storage Association UK (SSA UK). They offer resources such as a Quick Guide on Business Rates for Container Storage.
Since this area can be quite complex and the applicability of business costs can vary based on individual circumstances, it's also advisable to seek professional advice or contact your local council for the most accurate information and guidance specific to your situation.
Managing business storage cost
To manage and potentially minimise business rates on your storage unit effectively, consider these strategies, drawing from the insights of Safestore and government guidelines:
Understand your liability
First, determine if your storage unit is liable for business rates. This involves assessing the use of the unit—if it's for commercial activities, it might attract higher storage prices. The Valuation Office Agency (VOA) can provide specific guidance, and your local council will issue the bill if applicable.
Explore business storage solutions
Secure storage facilities like HOLD offer solutions tailored exclusively for businesses. This can be a cost-effective and secure alternative to traditional business storage.
HOLD emphasises security and flexibility over average storage costs, offering units in numerous locations across the UK. We also have systems in place to accept deliveries on your behalf, which can save time and ensure that your business operations run smoothly.
Consult with professionals
For a detailed assessment of your situation, especially if you're considering contesting your unit's rateable value or if you believe you qualify for exemptions or reliefs not yet applied to your bill, seeking advice from a tax adviser or solicitor specialising in property law might be beneficial.
HOLD's storage experts stand ready to assist if you need more help.
Optimise your self storage use
Consider how you can use your storage space more efficiently. Reducing the size of your self storage unit or renegotiating terms with your storage provider can lead to direct savings on total storage costs.
Wrapping up
Navigating business rates for storage units in the UK underscores the need for clarity and strategic planning. We've delved into the essentials—what business rates are, how they might apply to storage units, available exemptions and reliefs, and strategies for managing these costs.
The takeaway is clear: being well-informed and proactive is key. Understanding the specifics of business rates, exploring available relief sptions, and seeking personalised advice can safeguard against unforeseen expenses. Optimising business storage unit cost requires a nuanced approach, balancing operational needs with financial prudence.
HOLD—The premier storage option in London
Unlike most storage facilities, HOLD puts your needs first. Based in the heart of King's Cross, we're a new-generation storage company that can serve your every need. Whether you're moving house, need a place to secure garden furniture or personal belongings, or somewhere to keep your business stock, we have you covered. Reach out to us today for a free, exclusive quote.
Frequently Asked Questions
What sizes of storage units are available for businesses?
Our storage units range from small lockers for documents to large spaces that can accommodate inventory, equipment, or office furniture. We recommend discussing your specific needs with our team to find the perfect fit for your business.
Are there any special security measures for business storage units?
Security is a top priority. All our units are monitored 24/7 with CCTV cameras, and each customer has a unique access code or key. We also offer units with enhanced security features for sensitive business materials.
Can HOLD self-storage accept deliveries on behalf of my business?
Yes, we can accept deliveries for your business, saving you time and ensuring your items are securely placed directly into your storage unit. Contact our staff to arrange this service.
What security measures do we have in place for our business storage units?
At HOLD, advanced security measures are essential for protecting our customer's business assets. The features we offer include:
- 24-hour CCTV
- Individually alarmed units
- Secure loading bay
- Robust security for individual units
- Personal pin codes
- Fire detection systems
These features not only provide peace of mind, but also protect your business assets from potential threats.
When can I access my business storage unit?
24/7 access hours and round-the-clock customer assistant are crucial features we offer for all our storage solutions at HOLD. Round-the-clock access caters to businesses that operate outside traditional business hours, allowing for late-night or early-morning inventory management. This continuous access is particularly beneficial for businesses that face seasonal demand fluctuations, aiding in effective stock management.
