Written by: Keith Tully
Reviewed: Wednesday 29th August, 2018
Local councils in England are referring business rate debts to bailiffs at a rate of more than 200 each day, according to a recent investigation.
Business rates were reformed by government in April 2017 in ways that led to extra financial pressure for many thousands of enterprises across the country and a sizable minority are clearly struggling to keep pace with demands for the resulting payments.
Remarkably, as many as 81,000 commercial premises are believed to have been referred to bailiffs by local councils in relation to unpaid business rates during the year 2017/18.
Data on the subject has been attained by the Altus Group, a business advisory firm, via a freedom of information request.
The released information covers 264 councils in England and roughly 1.6 million properties, with around one in every 15 companies with business rate bills to pay having faced enforcement action during the 12 months from April 2017.
Pubs, eateries of various sorts and high street retailers were among those to be worst affected by the changes to the UK’s business rates regime.
For their part, local councils in many areas of the country have been finding it tough to balance their books in recent years, with business rates often accounting for a very considerable portion of their annual income.
“Councils are taking enforcement action much earlier since their finances became more aligned to business rates income,” said Robert Hayton from the Altus Group.
“This sometimes leads to companies with manifestly incorrect demands receiving summonses and facing enforcement action.
“The problem is also exacerbated by understaffing within some councils and the inordinate delays that this creates in dealing with ratepayers.”
The highest rate of bailiff referrals in relation to business rate arrears was found to be in Birmingham, where the city council referred 3,864 properties to enforcement agents during the most recent full year.
A sharp rise in bailiff referrals was recorded by Manchester City Council in the year, with the authority passing on details of 2,667 businesses to bailiffs during 2017/18, as compared to 1,932 in 2016/17, according to the official figures.