Councils ‘take legal action for unpaid business rates’

6 Aug 19

Local authorities in England sued nearly 10% of local businesses for failure to pay business rates last financial year, analysis has found.

Around 190,000 pubs, shops, restaurants and offices were sued over business rates arrears in 2018-19 accounting for 9.8% of all properties that pay business rates, according to real estate adviser Altus Group.

Altus Group collected Freedom of Information data on 90% of properties that pay business rates and found 171,018 were issued a summons to appear before magistrates.

But extrapolating the data to the total number of properties showed the real number is likely to be 190,070 summons – around 750 every single working day.

The top five councils with the most summons issued were: Westminster (6,882), Birmingham (6,116), Manchester (5,228), Liverpool (4,254) and Leeds (3,497).

Those suing the highest percentage of premises were: Richmond and Wandsworth (27.6%), Islington (23.3%), Middlesbrough (23.3%), Liverpool (22%) and Bracknell Forest (20.3%).

Robert Hayton, head of UK business rates at Altus Group, said the government’s reliance on property for tax revenues was too great.

“With 1,255,800 of non domestic premises actually having rates liabilities to pay, in real terms 15.14% of firms, almost one in every six with an actual bill, received a summons to appear before a magistrate during the last year,” he added.

Hayton said “major retail and hospitality businesses were reducing their estates and headcount often citing high level of rates as a contributory factor whilst other sectors, such as manufacturing, were hurting too.”

Councils will become more reliant on business rates in future as the government plans to increase business rates retention from 50% to 75% by 2020-21.

The Ministry of Housing, Communities and Local Government has been contacted for comment.

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