Redbridge Council took more than 1,000 firms to court over business rates, figures show
PUBLISHED: 11:53 25 July 2018 | UPDATED: 07:30 26 July 2018
The council took more than 1,000 businesses to court for failing to pay business rates, figures have revealed.
An investigation by real estate advisor Altus Group showed that Redbridge Council in the last financial year hauled 1,055 firms before magistrates to recover the tax.
The figure – gained through a freedom of information request sent to all London councils and replied to by 25 – compares to first place Tower Hamlets (2,876), second place Hackney (2,282) and Sutton with the lowest at 403.
National government works out business rates based on a property’s ‘rateable value’ meaning its rental value on the open market. They are updated every five years.
In Redbridge 4,755 firms were liable to pay between April 2017 and March 2018, Altus Group report. Just over a fifth were taken to court.
The numbers led to claims the new rates – re-calculated last year – were criminalising firms struggling to cope with an increasing tax burden.
Altus Group’s Robert Hayton said the findings went beyond simple tax avoidance.
“London was the hardest hit of any region under last year’s revaluation. It is therefore unsurprising that the level of summons being issued by councils in London was far higher than the average for England.”
A council spokeswoman said: “Rates make up a large proportion of the council’s income and accordingly we must protect residents’ interests in collecting the rates due.
“Most businesses pay their rates on time without the need for court action, so it is only fair the council pursues outstanding debts.” Chairman of Redbridge Chamber of Commerce Geoff Hill said: “We need to tax business on a percentage of profit. That will mean they can afford their taxes. It also means the local authority and London mayor’s office will be incentivised to do as much as they can to help businesses to be profitable.”
The Redbridge spokeswoman said the council makes sure businesses get the most out of reliefs and allowances in some cases looking again at payment plans for those that fall behind.
But she explained some commercial properties are divided into multiple units meaning some business owners were avoiding paying their share by playing the system.
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