Thousands of UK Businesses Face Court Over Rising Business Rates

From January to April 2018, as many as one in six UK businesses faced court proceedings for non-payment of business rates. The rapid rise in the level of business rates has been blamed by many as the reason business owners are unable to make these payments. Summons are being issued too hastily, according to one business leader, with those who believe the bill for their business rates is unreasonably high facing a long and arduous process of appeals while the bills keep arriving.

Specialist business rates company RVA Surveyors has the required expert knowledge of the complex ratings system to help businesses achieve any reduction or rebate on their business rates that they may be eligible for on a No Reduction No Fee basis, and has so far been appointed to more than 30,000 properties in the UK.

However, data covering 68% of all UK properties liable for business rates showed that almost 130,000 business owners had been up before the magistrates for non-payment of rates bills. An explanation of business rates can be found in the PDF attachment.

Business Owners Taken to Court

The data, which was collected via Freedom of Information requests from 212 local authorities across England, showed that 129,306 court summonses had been issued to the owners of pubs, high street retailers and other firms. The actual figure could be nearer 200,000 according to Altus Group, the retail estate adviser that submitted the requests for information.

Birmingham council was the most active in taking business owners to court, issuing more than 7,000 summons, followed by Liverpool with more than 3,500. Councils in Bristol, Leeds, Sheffield, Bradford and London’s Camden and Tower Hamlets areas each issued more than 2,000 court summons to local business owners.

The Federation of Small Businesses policy chairman Martin McTague warned that these summonses can be tricky to challenge and pointed out that in many cases they were being issued with inappropriate haste, sometimes just a few weeks after the initial issuance of the tax bill. The short video attachment looks at what the Federation of Small Businesses does.

Disproportionate Rates Bills

The way the current business rates system is set up means that in many areas, small firms and high street retailers are hit by disproportionately unfair bills as they require premises in areas with high footfall, which often means property values are higher. Hard-working owners of small businesses often find that large business rates bills begin to apply before they make any turnover or profit. In areas where the local economy is underperforming, many business owners also find their bills disproportionately high even where property values have fallen.

Mark Carney, governor of the Bank of England, came forward in May 2018 to admit that business rates are now a real issue across the UK. Prior to the latest reassessment of business rates, business owners in the UK were already facing the largest tax bills in any country in Europe. Following the 2017 revaluation, many businesses were facing huge hikes on top of this.

High Streets Stores Closing

Data from the Federation of Small Businesses collected early in 2017 suggested that as many as 15 independent stores on UK high streets were closing every day, with many abandoning the idea of physical premises to retail online, where business rates do not apply. This data also showed that 7% of small firms receive business rates bills that exceed the amount they pay in rent for the property.

The attached infographic explores some of the statistics regarding how business rates are affecting the high street.