One in every eight firms in England and Wales has been taken to court over unpaid business rates, new figures suggest – and experts warn this is likely to increase following April’s rating revaluation.
Nearly 200,000 businesses in England and Wales – or one in eight – were brought before a magistrate in 2015/16, the survey by rents and rates specialist CVS found.
In Middlesbrough, a quarter of firms faced legal proceedings over unpaid business rates. The London borough of Waltham Forest was not far behind, summoning 22% of firms to court.
CVS said the situation is likely to be exacerbated following the business rates revaluation in April, which is expected to result in a rise in the property tax across London.
Yesterday, London mayor Sadiq Khan said he was “shocked” by the government’s actions on business rates and has warned that many firms in the capital may be forced to close.
Khan described the expected rates increases and wider Brexit uncertainty as a “double whammy for business in London”.
He added: “I am genuinely shocked that the government’s actions will damage the prospects of so many businesses in the capital, putting many at risk of closure. The very character of our local high streets is under threat – London’s businesses have been warning about the damaging effect of this skewed and unfair revaluation for months, and yet the government blunders on.
“This is the last thing that London businesses need and will serve as a kick in the teeth for tens of thousands of companies in the capital who are still digesting the recent vote to leave the European Union.
The mayor was one of the signatories to a letter sent to chancellor Philip Hammond yesterday, which called on him to introduce measures that would ease the short-term pain of the rating revaluation.
The Telegraph reported that ministers are set to give way over business rates and pay hundreds of millions of pounds in compensation to those worst hit by the tax.
It said Hammond is examining plans to offer extra funding to independent retailers and small companies facing huge increases in business rates.