Belfast Telegraph

Northern Ireland's £30m annual bill to write off rates debt equal to cost of RHI

By Adrian Rutherford

Around £30m in rates debt is written off every year in Northern Ireland.

Over the last four years the bill totals almost £115m, figures reveal.

The annual cost is similar to that of the Renewable Heat Incentive scandal, which has dominated headlines in recent weeks.

Debtor insolvency is the biggest factor in unrecoverable money, Finance Minister Mairtin O Muilleoir said.

He released details of debt write-off after an Assembly question from the TUV's Jim Allister.

In the 12 months to last April the net debt written off was £28,664,250. That is relatively unchanged since 2012/13, when £29,105,727 was lost.

Across the four years, the total write-off was £114,713,513.

Mr Allister said: "Those who faithfully pay their rates will rightly question why these figures are so high.

"Councils and regional government are missing out on the best part of £30m every year due to the write-off of rates debt, which is unacceptable, with a 10% rise in the last year."

Mr Allister questioned whether more could be done to ensure that rates were paid.

"Those who struggle to meet their rates demands are entitled to expect all to be required to pull their weight," he added.

UUP economy spokesman Philip Smith said: "Here we have another example where £30m has been thrown away last year. We are talking about a yearly bill roughly the same as what RHI is costing us."

He added: "We are now in a position where we have no budget. Until that situation is rectified, we are facing a 5% cut across the board, plus the impact of inflation, plus the impact of ongoing waste, whether it be from RHI or, in this case, unpaid rates."

Land and Property Service (LPS) is responsible for rates collection.

Mr O Muilleoir said: "No debt is written off until all possible rate recovery actions have been exhausted.

"In the event of non-payment of rates, LPS will continue to pursue recovery action through the Enforcement of Judgments Office or bankruptcy.

"The main contributory factor to write-off levels during the reported period was debtor insolvency.

"Where a debtor is insolvent; such as in cases of bankruptcy or liquidation, that debt is uncollectable under existing insolvency legislation and LPS has to write this off.

"Over this period, the percentage of debt written off as a result of insolvency peaked at 70.3% in 2014/15 and in 2015/16 had reduced marginally to 67.4%.

"This was largely due to the economic downturn, which rendered higher levels of businesses insolvent than prior to the recession, and left a number of domestic ratepayers in negative equity. LPS write off levels are comparable with similarly sized English councils, where non-payment of rates is a criminal offence and therefore has stronger penalties."

As of April 2016, the total amount of unpaid rates was £142.7m.

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