Bailiffs unleashed on nearly 41,000 firms failing to pay rising business rates
Bailiffs are given power to enter premises, seize goods and sell them at public auction in order to settle business debts.
English and Welsh councils are believed to have unleashed bailiffs on nearly 41,000 firms that struggled to pay higher business rates following the Government’s controversial revaluation last year.
The estimate was the result of an investigation by ratings adviser Altus Group, which said tens of thousands of businesses that failed to pay higher business rates were subsequently referred to bailiffs that were given power to enter premises, seize goods and sell them at public auction in order to settle their debts.
That figure only accounts for the five months after the April revaluation, the group said.
The projection is based on a Freedom of Information request that yielded data for around 1.37 million business premises in 247 local authorities in England and Wales in the first five months following the revaluation.
It showed that 28,355 premises liable for business rates were referred to bailiff enforcement over that period.
Using that information, Altus Group made estimates to account for the 1.98 million liable business properties for the total 348 billing councils in England and Wales, bringing the total number of firms referred to bailiffs over the period to 40,965.
Businesses across Britain have been left reeling by the revaluation, which accounted for property price changes over the last seven years.
Altus Group’s UK president of business rates Alex Probyn 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.”
Two London boroughs – Hounslow and Lewisham – had the highest referrals, with one in 11 premises in their area assigned bailiffs for enforcement.
Businesses in Hounslow and Lewisham saw rateable values jump by 25.09% and 31.83%, respectively.
Altus Group noted that Britain collected more than £80 billion in property taxes last year.
“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,” Mr Probyn said.
Claire Kober, chairwoman of the Local Government Association’s resources board, said business rates provided key revenue for councils.
“Other businesses and the services that local communities rely on will suffer if councils are unable to collect business rates owed to them.
“While councils do not set business rates, they do what they can to help businesses struggling to pay.”
But growing pressure over the controversial revaluation has not gone unnoticed by Chancellor Philip Hammond, who has brought forward plans to swap the way it determines the annual increase of business rates from the higher Retail Price Index (RPI) measure of inflation to the lower Consumer Price Index (CPI).
Those changes, which were set to be implemented by 2020, will now take effect in April 2018, resulting in a 3% rise in business rates rather than a 4% increase had it been indexed to RPI.
In his autumn Budget statement, Mr Hammond said the move would save businesses a total of £2.3 billion over five years, while he also revealed plans to reduce the period between revaluations in a move that is expected to further ease pressure on UK firms.
A Government spokesman said: “It is important that councils are proportionate in enforcement and use bailiffs only as a last resort.
“However, every pound of business rates not collected puts additional pressure on council budgets and their ability to deliver services.
“Following the revaluation, the majority of businesses saw no change or a fall in their business rates liability and a £3.6 billion transitional relief scheme is providing support for the minority of businesses who face increases.”