Bailiff Instructions to Collect Rates Tax Soars 9% since Revaluation
An investigation by Britain’s largest ratings advisor, Altus Group, forecasts that around 41,000 business premises were referred by councils to Bailiffs in the first five months under the new revaluation for non payment of their business rates to levy distress and to seize their goods.
A Bailiff is authorised by councils to collect a debt on their behalf and can enter premises to seize goods and sell these at public auction, with the proceeds taken by councils to settle the debt. This process is known as ‘distress’.
Under the Freedom of Information Act all councils that collect business rates were asked to provide details of how many businesses had been referred to Bailiffs for collection. Details were provided on more than 1.37million properties from 247 local authorities. Between 1st April and 31st August 2017, a total of 28,355 business premises liable for business rates had already been referred to a Bailiff for enforcement.
Altus Group projects that the overall number for the 5 month period could be 40,965 having regard for the 1.98million properties liable for business rates and say this represents a 9% rise in the use of Bailiffs by councils compared with 2016/17.
The London Boroughs of Hounslow and Lewisham referred the most with 1 in 11 of the overall premises in their areas referred to Bailiffs for enforcement and facing the prospect of having goods seized.
Hounslow instructed Bailiffs 636 times on their 6,967 properties liable for business rates in the 5 month period compared to 696 for the whole of 2016/17.
Lewisham made 538 referrals on their 5,846 business premises. Rateable values in Hounslow rose by 25.09% and by 31.83% in Lewisham as a result of last April’s revaluation.
Britain last year cemented its position as the country with the highest property taxes, passing £80 billion for the first time according to the OECD.
Alex Probyn, UK president of business rates at Altus Group, said: “It isn’t only those whose values have increased that are struggling. The current, deeply unfair, system of transitional adjustment severely limits the amount by which bills can go down, meaning many businesses are paying disproportionately high bills in locations where local economies are underperforming and values are falling.”
English Councils have made provision for an average of 3.2% of business rates receipts to be returned to ratepayers following successful appeals – a total of £4.5 billion over the next 5 years from 2017 to 2022.
Probyn added: “It goes without saying that now is the time, more than ever, that businesses need to carefully understand their new rates assessment and to check that what they’re being told to pay is indeed accurate and correct.”