William Eichler 05 August 2019

Councils accused of ‘criminalising’ businesses over rates arrears

Local authorities are ‘criminalising’ struggling businesses such as pubs and shops by taking them to court over non-payment of business rates, a real estate advisor claims.

A study by Altus Group found that last year 190,000 non-domestic premises such as pubs, shops, restaurants and offices in England were hauled before a Magistrate for business rates arrears.

Under the Freedom of Information Act, the real estate advisor asked councils to provide details on how many businesses had been summonsed between 1 April 2018 and 31 March 2019.

Information was provided on 1,740,073 out of the 1,933,963 non-domestic properties liable for business rates and show a total of 171,018 summonses were issued.

Altus Group estimates that the overall figure is likely to be 190,070 and infers that around 750 summonses were made every working day.

The company also found that Westminster council summonsed the most businesses (6,882) during the time period studied, with Birmingham (6,166) and Manchester (5,228) second and third respectively.

Richmond & Wandsworth summonsed the highest percentage (27.6%) of its local businesses over business rates arrears.

Robert Hayton, head of UK Business Rates at Altus Group, said that ‘a tax stimulus was desperately needed’, adding: ‘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.’

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