Updated October 2026
In short: Business rates are paid by whoever is in rateable occupation, so subletting part or all of a property can move the liability to your subtenant. That's legitimate when it's a genuine commercial letting. Short, artificial lettings designed only to trigger empty-property relief are another matter: the rules have been tightened, and councils actively challenge them.
| Situation | Who usually pays rates | Notes |
|---|---|---|
| You sublet the whole unit to a genuine occupier | The subtenant | Requires landlord consent under most leases |
| You sublet part of the unit | Depends on whether the parts are separately assessed | You may need the Valuation Office to split the assessment |
| Shared space or serviced desks | Usually you, as the head occupier | Licensees rarely become ratepayers |
| The property is empty | You (as the person entitled to occupy), after any empty-rate relief | Relief periods are short; most empty property then pays full rates |
| Short "occupation" just to restart empty relief | You, and potentially challenged | Anti-avoidance rules and case law target these schemes |
Where avoidance crosses the line
Arrangements such as granting a short lease to a shell company that then goes into liquidation, or putting minimal items in a building for six weeks to reset empty-rate relief, have been widely used and widely challenged. Recent rule changes extend the occupation period needed to restart relief, and councils can pursue directors and use tribunals and courts. Advisers marketing "rates mitigation" schemes should be treated with caution.
Before you sublet
- Check your lease: most require landlord consent and set conditions for subletting
- Confirm the subtenant will be in genuine occupation
- Decide whether the space needs a separate rating assessment
- Agree in the sublease who pays rates, service charge and utilities
- Consider whether the sublease should exclude security of tenure
- Tell the council about the change of occupier
Lawful ways to cut your rates bill
- Small business rate relief if your rateable value is low enough
- Checking your rateable value through Check, Challenge, Appeal with the Valuation Office Agency
- Retail, hospitality and leisure relief where available
- Charitable relief for qualifying occupiers
- Right-sizing: subletting genuinely surplus space, or surrendering part of the lease
How Fraser Bond helps occupiers
- Finding genuine subtenants for surplus space
- Negotiating landlord consent and sublease terms
- Lease restructuring, partial surrenders and assignments
- Tenant representation when you need to move or downsize
Paying for space you don't use?
We'll help you sublet, restructure or exit your lease properly.
Speak to our teamRelated guides
- Reduce Business Rates by Subletting
- Business Rates Support for Small Commercial Landlords – A Practical Guide
- Protect Your Assets: The Importance of Selling Your Business to Avoid Legal Issues
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