More firms ending up in Magistrates’ over non-payment of business rates

 

A short but certainly not sweet update on another impact of the revaluation on businesses across England and Wales.

Almost 200,000 businesses are believed to have been summoned to appear before magistrates for non-payment of business rates in the 2017/18 financial year.

The stats come from a Freedom of Information request that was sent to 212 councils that cover over 1.3m businesses nationwide and showed that 129,306 summonses were issued – equating to 9.9% in total.

That percentage goes even higher when you take out the high number of small businesses that are exempt from business rates, potentially nearer to one in six if you crunch the figures down a bit further.

Just because a summons has been issued doesn’t necessarily means that business owners have been hauled before the bench, some may have managed to scrape together enough to clear the debt or negotiate a deal with their local authority after the summons has been issued. But, whichever way you look at it there is an insane amount of money being spent on administering these summonses, not to mention the times and costs attached to any actual court appearances if it gets that far.

We are seeing a groaning system that issues unfeasible business rate demands to small businesses which cannot pay and then another branch of the public sector – albeit a legal one – being brought in to scare or fine individuals, adding more debt to the original pile.

Summons may be the last resort for Local Authorities but surely there has to be a better way to ensure the correct business rate taxes are paid at a local level to support services than involving magistrates’ courts?