As company owners across England and Wales grapple with the growing property tax burden, new research has revealed a sudden spike in bailiff enforcement against unpaid business rates.
An investigation undertaken by ratings advisor Altus Group found that around 41,000 business premises were approached by debt collectors in the five months after 1 April 2017 – a nine per cent increase compared to the same period in 2016.
Following authorisation by a local authority, debt enforcement agents are able to enter a commercial premises and seize goods to sell at public auction, with the proceeds taken by the council to settle unpaid business rates.
A Freedom of Information (FOI) request raised in the investigation asked local councils to submit details on bailiff enforcement against local businesses, of which 247 authorities responded with data on 1.37m properties.
Between 1 April and 31 August 2017 – the first five months of the latest business rates regime – a total of 28,355 commercial properties were referred for bailiff enforcement, according to the FOI request.
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When considering the 1.98m properties liable for business rates, Altus Group predicted the total number of bailiff collections was likely to be 40,965, a nine per cent rise in bailiff enforcement from 2016/17.
The London Boroughs of Hounslow and Lewisham resorted to bailiff enforcement most frequently in the five month period, with one in 11 business owners in both areas facing the prospect of having goods seized.
In 2017, rateable values in Hounslow rose by 25.09 per cent and by 31.83 per cent in Lewisham, demonstrating the challenges posed by business rates revaluation in both boroughs.
Commenting on the impact of revaluation since 2017, Alex Probyn, UK business rates president at Altus Group, said even those without increased bills had struggled to keep up payments.
“The current, deeply unfair, system of transitional adjustment severely limits the amount by which bills can go down, meaning many businesses are paying disproportionately high bills in locations where local economies are underperforming and values are falling,” Probyn said.
“It goes without saying that now is the time, more than ever, that businesses need to carefully understand their new rates assessment and to check that what they’re being told to pay is indeed accurate and correct.”
Find out everything you need to know about the business rates appeal process
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