Additional costs of business premises

What is it?

Other info

Service Charges

As a tenant you will most likely have to pay a service charge for any services that the landlord provides, this is particularly true if you are sharing commercial space. They may include waste collection and car parking.

Check how much these are and what services they cover, such as cleaning and heating. It’s important to establish what facilities you may be sharing with other tenants/ other property owners in the area.

Business Rates

A tax on properties used for business, they are paid either by the owner or the leaseholder. The council work out your rates by multiplying the rateable value of your property by a national multiplier.

You may also be entitled to business rate relief, this includes small business tax, rural rates, charitable rates, enterprise zones and retail relief.

Capital Allowance

Capital Allowance is a relief on tax of fixed assets or investments (generally those which will have a lasting benefit on the company such as plant machinery, patent rights and dredging). These can be claimed in your tax return.

Look at the Gov Capital Allowances website or speak to a Capital Allowance Specialist to find out which relief you may be eligible for.

Stamp Duty Land Tax

Stamp duty is applied to any purchase of a property or land in England, Wales and Northern Ireland over a certain amount. Stamp Duty is dependent on the price of your property.


Land and Buildings Transaction Tax replaced Stamp Duty Tax in Scotland in 2015. This is also dependant on the price of the property.

You can use the HM Revenue Stamp Duty Land Tax calculator to estimate your tax. Or use the Revenue Scotland calculator for LBTT (Land and Building Transaction Tax)

Professional Fees

You should consider the fees and charges for any professional guidance that you receive throughout the process of changing business premises.

For example solicitors, surveyors and estate agents will likely charge an agreed percentage, this would depend on the complexity and skills required to complete the acquisitions.

VAT

The sale or lease of a commercial property is usually exempt from VAT. However, commercial property owners can opt to charge VAT (also known as ‘Option to Tax’) at the standard rate – currently 20%.

VAT in relation to commercial property is generally a complex area; you should seek advice from your solicitor.

Fit Out Costs

You may need to bring in a fit out company to refurnish and layout your new building.

Deposits

Whether you are buying or renting a commercial property, you must remember that you will be required to put down an initial deposit on the building.

Make sure that you factor this into your business finance plans from the moment that you decide you want to move premises. Deposits vary from premises to premises but must be considered from the outset.