Thursday 12 November 2020 4:28 pm

Councils pile pressure on firms over unpaid business rates during pandemic

Local authorities have begun to turn up the heat on businesses that have been unable to pay rates bills during the pandemic, with some pursuing claims through the courts.

According to property consultancy Colliers International, an increasing number of clients are receiving letters demanding payment or court summons. 

Read more: Sadiq Khan pushes for extension on business rates holiday for retail, leisure and hospitality businesses

Office occupiers were not granted a business rates holiday during the Covid-19 crisis, unlike retail and leisure firms, but many have been left empty due to lockdown, restrictions on travel and social distancing rules.

Colliers said one West London council had launched legal action against a Money Exchange shop, where the business did not get a grant but was not entitled to rates relief.

The company is now being chased for payments through the courts during the second nationwide coronavirus lockdown. 

In Hampshire, a local authority issued final notices to businesses in June, at the height of the pandemic, Colliers said.

It will now only accept catch-up payments with costs included or a full-year’s liability paid up front.

An unprecedented 183,000 companies have begun a business rates appeal process between April and September, averaging more than 1,000 per day, as the number of firms citing a Material Change of Circumstance soared.

John Webber, head of business rates at Colliers, said the surge has put the consultancy firm on a “war footing”. 

Webber said: “We have been negotiating on our client’s behalf with local billing authorities requesting them to show leniency to businesses that are struggling to pay their bills. We are finding that attitudes vary greatly depending on where businesses are based and the attitudes of the individual billing authority. 

“There is a total lack of consistency- some clients for example with properties across boundaries find they are granted reliefs for some of their properties by certain local billing authorities but not from others.”

Read more: Covid is an opportunity to scrap business rates altogether

He added: “And recently there has certainly been a step up of enforcement activity via the courts. It’s ironic that whilst many businesses have been forced to “empty “their offices for a second lockdown, the courts are being kept open in this period to deal with the backlog of cases.

“As a result, we believe we’ll see more court summonses and enforcements as we go forward.”

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