16 February 2018

The extent of business rates relief fraud

It is estimated that there could be over £25m worth of fraud being perpetuated by businesses falsely claiming Small Business Rates Relief across England, according to data analytics experts Destin Solutions.

Small Business Rates Relief (SBRR) is provided to a number of businesses across England on the basis that they either only use one property or have a rateable value of less than £15,000.

Historically information provided by small businesses claiming relief has been extremely difficult for local authorities to verify due to lack of resources and an inability to access a country-wide view of businesses and the properties they occupy.

Analysing the business rate information of 98.5% of English local authorities, Destin Solutions found that a number of businesses claiming relief have been doing this erroneously or falsely.

A significant number of businesses had other branches set up in neighbouring and other authorities and are therefore not entitled to the relief they are claiming.

Focusing on 24 selected authorities, there was a staggering £2.68m worth of suspicious claims requiring further investigation.

These 24 authorities represent just over 7% of English authorities meaning that the actual figure for fraud will be significantly higher and for cash-strapped authorities, recovery of funds and cutting down on fraudulent claims will provide a much-needed boost to finances.

One of the founding directors of Destin Solutions, Duncan Baxter, said: 'Our inability in the past to gain a single country-wide view of all 'ratepayers', has led to a situation where I think businesses think they can get away with not declaring the full extent of their operation.

'We now have a very strong deterrent and the fact that HUB requires no input or additional effort from local authorities and is available now, means we can start tackling the problem head-on.'

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