English and Welsh councils are believed to have used Enforcement Agents 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 Enforcement Agents 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 Enforcement Agent 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 Enforcement Agent 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.”
“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.”
Two London boroughs – Hounslow and Lewisham – had the highest referrals, with one in 11 premises in their area assigned to Enforcement Agent for collections. 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.
Claire Kober, Chair 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.”