Almost 200,000 pubs, restaurants and retail spaces in England were hauled into court last year for failing to pay business rates.
According to an investigation by real estate adviser Altus Group, during the last financial year of 2018/19, 190,000 domestic premises were found to be falling short of paying the correct amount, around 750 businesses per day.
Property taxes in the UK, as a percentage of overall taxation, are the highest across the whole of the European Union being more than double the EU average.
Robert Hayton, head of UK business rates at Altus Group, said that “a tax stimulus was desperately needed” saying “major retail and hospitality businesses were reducing their estates and headcount often citing high level of rates as a contributory factor.”
He added that the Government’s reliance upon property for tax revenues is too great with the findings going beyond simple tax avoidance explaining “with 1,255,800 of non domestic premises actually having rates liabilities to pay, in real terms 15.14% of firms, almost 1 in every 6 with an actual bill, received a summons to appear before a Magistrate during the last year.”
From April 2017 at the last revaluation, businesses with only one property liable to business rates were exempt if the rateable value was £12,000 or less up from £6,000.
Analysis of official Government data by Altus Group show that, as a result of the changes to small business rates relief, 678,163 out of the 1,933,963 premises, more than a third, were completely exempt from rates all together in England and had no bill to pay.
Top 5 Summonsing Councils By Volume
Westminster – 6,882
Birmingham – 6,166
Manchester – 5,228
Liverpool – 4,254
Leeds – 3,497
Top 5 Summonsing Councils By Percentage of Premises Sued
Richmond & Wandsworth – 27.6%
Islington – 23.3%
Middlesbrough – 23.3%
Liverpool – 22%
Bracknell Forest – 20.3%
The standard rate of tax, which applies to all medium and large premises in England with a rateable value over £51,000, rose by 2.4% to 50.4p on 1st April for 2019/20, the first time the tax rate for business rates in England has gone above 50%.