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Councils sue 750 firms a day over business rates arrears

Around 190,000 non-domestic premises in England, including shops, pubs and restaurants, were taken to court for non-payment of their business rates during the 2018/19 financial year, new research by Altus Group has found. 

Under the Freedom of Information Act, all councils in England were asked to provide details of how many businesses had been summonsed between 1 April 2018 and 31 March 2019. Details were provided on 1,740,073 out of the 1,933,963 non-domestic properties liable for business rates.

The findings showed a total of 171,018 summons were issued, totalling 9.83% of all premises.

As a result, real estate firm Altus Group has forecast that the overall number is likely to have been in the region of 190,070 - around 750 businesses every working day.

The top five summonsing councils, by volume, were Westminster (6,882); Birmingham (6,166); Manchester (5,228); Liverpool (4,254) and Leeds (3,497). 

Meanwhile, the top five summonsing councils by percentage of premises sued were Richmond & Wandsworth (27.6%); Islington (23.3%); Middlesborough (23.3%); Liverpool (22%) and Bracknell Forest (20.3%). 

Robert Hayton, head of UK business rates at Altus Group, said that the government’s reliance upon property for tax revenues is too great, with the findings going beyond simple tax avoidance, explaining “with 1,255,800 of non domestic premises actually having rates liabilities to pay, in real terms 15.14% of firms, almost 1 in every 6 with an actual bill, received a summons to appear before a Magistrate during the last year.”

Hayton added “a tax stimulus was desperately needed” saying “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.”

The standard rate of tax, which applies to all medium and large premises in England with a rateable value over £51,000, rose by 2.4% to 50.4p on 1 April for 2019/20, the first time the tax rate for business rates in England has gone above 50%.




Readers' comments (3)

  • Richmond and Wandsworth are separate councils: they appear to have been combined in this report

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  • Hi anonymous, Richmond and Wandsworth Councils have entered into an agreement to share a single staffing structure across the two boroughs, which is why the figures are now combined:

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  • Why wont councils change the way rates are the moment its just a flat fee based on a million year old metric that enables the councils to grab money and importantly do what most retailers cannot do which is budget with any confidence level.

    My suggestion is they charge business rates on a per sq ft/time basis, eg the longer you stay open for biz the more you pay, open for less hours you pay less..that way rates become a variable cost for physical retailers/businsses.

    Pure play on line business, etailers etc... they are 24/7 so they would pay more. That would solve the “them and us” situation that has arisen.

    Its fair, its simple, they could even invent a smart meter for retailers to monitor opening/closing times... importantly it would make business rates variable, and controllable by those who pay it.

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