Can't pay, won't pay - business buckles under the rates burden as 1 in every 8 business haul

Thursday, March 2, 2017

Our recent investigation has found that nearly 200,000 businesses across England and Wales were hauled before a Magistrate in 2015/16 for non-payment of their business rates bills.

Under the Freedom of Information Act, all billing authorities were asked to provide details of how many businesses had been summonsed. We were provided with data on more than 1.6million properties from 280 local authorities.

The startling revelations show, across England and Wales, during 2015/16, a total of 193,561 business premises liable for business rates were hauled before a Magistrate for non-payment.

We can also reveal that, on average, 1 in every 8 businesses received a summons to appear.

Middlesbrough Borough Council summonsed the most businesses, with 1,088 Court papers being served on their businesses, representing 1 in 4 of all premises liable for rates.

During the current financial year 2016/17, from April to November, a total of 143,482 summonses had already been served in just a 7 month period.

Top 15 Most Summonsing Authorities

Across the Capital, of the local authorities who replied, a total of 39,098 summons were issued, representing 16% of businesses, meaning 1 in every 6 properties across London were summonsed.

The situation is likely to be exacerbated in April as we project that the 32 boroughs of London plus the City will face a business rates tax hike of £9.38billion over the next 5 years.

The Office for Budget Responsibility say that UK business rates receipts overall were £28.8billion in 2015/16, projected to be 1.53% of GDP.

In December it was revealed that UK property taxes were the highest of all 35 OECD countries at £74.2bn.

The OECD’s annual taxation revenue statistical publication showed property taxes in the UK were up by a massive £4.437bn on the previous year, ranking the UK in 1st place.

It is our belief that the Government should be more creative at the way it looks at taxation, and that business rates needs to be looked at more holistically within the overall context of the economy and other taxes, and not simply as a guaranteed revenue stream

Could lower business rates act as a catalyst to drive economic growth and create additional employment? Would those additional taxes compensate for any loss in revenue for business rates? These are the types of questions we’re putting to H M Treasury.