Laura Sharman 17 January 2020

Councils losing £250m a year through business rates avoidance

Councils losing £250m a year through business rates avoidance image

Councils are losing £250m a year due to businesses avoiding paying their rates, new research has found.

A new survey by the Local Government Association (LGA) found eight in 10 councils said they do not have enough power to tackle the problem.

The LGA is calling for tougher legislation to close loopholes and tackle business rates avoidance. It also wants councils to have new legal powers to enter and inspect non-domestic properties to verify information relevant to billing.

Councils said the most common method of business rates avoidance was businesses repeatedly only occupying a property for six weeks to take advantage of the three month empty property exemption.

Cllr Richard Watts, chair of the LGA’s Resources Board, said: 'Too many businesses are exploiting loopholes and manipulating the system to avoid paying the tax they owe.

'The scale of business rates avoidance shows more needs to be done to tackle this behaviour and reduce avoidance. Every penny lost through business rates avoidance is money that could be spent on adult social care, children’s services, fixing roads and other vital community services.

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