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Businesses across England and Wales are grappling with the huge business rates burden ahead of the controversial revaluation in April new research reveals. An exclusive investigation by CVS Business Rent & Rates Specialists has found nearly 200,000 businesses were hauled before a Magistrate in 2015/16 for non-payment of their business rates fuelling claims the system is criminalising struggling businesses.
Under the Freedom of Information Act, all billing authorities were asked to provide details of how many businesses had been summonsed with details being provided on more than 1.6million properties from 280 local authorities.
The startling revelations show, across England and Wales, during 2015/16, a total of 193,561 business premises liable for business rates were hauled before a Magistrate for non-payment. The data reveals that, on average, 1 in every 8 businesses received a summons to appear.
Middlesbrough Borough Council summonsed the most businesses with 1,088 Court papers being served on their businesses, representing 1 in 4 of all premises liable for rates. During the current financial year 2016/17 from April to November a total of 143,482 summonses had already been served in just a 7 month period.
Top 15 Most Summonsing Authorities
| Council | Properties Liable For Rates | 2015/2016 Summons Issued | Percentage |
| Middlesbrough Borough Council | 4295 | 1088 | 25% |
| London Borough Of Waltham Forest | 6736 | 1484 | 22% |
| Dartford Borough Council | 3034 | 625 | 21% |
| London Borough Of Ealing | 10083 | 2129 | 21% |
| London Borough Of Haringey | 6957 | 1491 | 21% |
| Manchester City Council | 25597 | 5363 | 21% |
| London Borough Of Hackney | 10238 | 2020 | 20% |
| London Borough Of Harrow | 5390 | 1074 | 20% |
| London Borough Of Havering | 5812 | 1165 | 20% |
| Liverpool City Council | 18226 | 3414 | 19% |
| London Borough Of Brent | 8589 | 1647 | 19% |
| London Borough Of Hounslow | 7186 | 1378 | 19% |
| Oldham Borough Council | 7734 | 1492 | 19% |
| Tameside Metropolitan Borough Council | 7398 | 1379 | 19% |
| Birmingham City Council | 46633 | 8523 | 18% |
Across the Capital, of the local authorities who replied, a total of 39,098 summons were issued representing 16% of businesses, meaning 1 in every 6 properties across London were summonsed. The situation is likely to be exacerbated in April say CVS who have projected that the 32 boroughs of London plus the City of London will face a business rates tax hike of £9.38billion over the next 5 years.
The Office for Budget Responsibility say that UK business rates receipts overall were £28.8billion in 2015/16 projected to be 1.53% of GDP. In December it was revealed that UK property taxes were the highest of all 35 OECD countries at £74.2bn. The OECD’s annual taxation revenue statistical publication showed property taxes in the UK were up a massive £4.437bn on the previous year ranking the UK in 1st place.
Mark Rigby Chief Executive of CVS Business Rent & Rates Specialists said “With budget constraints and deficits, we need to be more creative at the way we look at taxation so I am left in no doubt that business rates need to be looked at more holistically within the overall context of the economy and other taxes but not simply as a guaranteed revenue stream. We need to fully understand the impact of business rates on business decision making processes not just for retail but as a whole. Could lower business rates act as a catalyst to drive economic growth and create additional employment? Would those additional taxes compensate for any loss in revenue for business rates? They are the conversations that must now be had with H M Treasury.”