• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • John Turnbull elected president of the SLT

    May 12, 2022

  • Pension pool identifies biodiversity as a priority

    May 11, 2022

  • TfL latest to face credit-rating downgrade by Moody’s

    May 10, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Call for action on £250m annual cost of business rates avoidance

0
  • by Mark Smulian
  • in 151 News · Resources
  • — 8 Jan, 2020

Councils are losing some £250m a year through business rates avoidance, equivalent to 1.0% of the total of this income source.

That claim has come from the Local Government Association (LGA) in its survey of business rates avoidance, which said legislation is needed to tackle this problem in England along similar lines to those proposed in Scotland.

Only 3% of respondents felt that councils had adequate powers to tackle avoidance, while 84% disagreed.

The LGA carried out the exercise for the first time since 2014 after what it said were repeated promises of action from ministers which had never become reality.

On average, the 120 councils that responded to the survey said they had lost £798,000 each in business rates in 2017-18.

This gave the £250m figure for England and the 1% level of loss, the same as was found in a similar survey carried out in 2014.

The proportion of councils reporting business rates avoidance of more than 2% had though risen from 6% to 15%.

Repeated short-term periods of occupation was the most common method of avoidance found, and this also had the highest average loss at £396,000.

Next came vacant properties leased to a charity with the next use purported to be wholly or mainly charitable, with an average loss of £153,000.

Currently, owners of empty premises are able to avoid or delay paying rates by if they claim their properties will be used by charities in future.

Almost half of respondents thought the use of companies that facilitate business rates avoidance in return for a cut of the savings was either widespread or very widespread.

Legal action against such avoidance schemes had been taken by almost half of respondents, with most saying they picked the cases they were most likely to win.

Of those that were not taking action, more than half reported that this was because the schemes concerned were within the law.

The LGA called for councils to get new legal powers to enter and inspect non-domestic properties to verify information relevant to billing.

It noted that in Scotland the Non-Domestic Rates (Scotland) Bill 2019 (Part 4) proposes a new power for ministers to make anti-avoidance regulations to prevent or minimise advantages arising from artificial non-domestic rates avoidance arrangements.

The government, it said, should, “as a matter of urgency…bring forward a similar package of measures to apply in England.”

Respondents also supported more integrated working with Her Majesty’s Revenue & Customs, the Charity Commission and Companies House, and said reform of empty property regulations, clarification and guidance on occupation and a duty to notify billing authorities of changes in occupation should be put in place.

Share

You may also like...

  • Auditors call for more investment in finance function skills 25th Feb, 2022
  • Room151 launches survey on IFRS 9 override and MRP impact 9th May, 2022
  • Andrew Hardingham: Holidays await but the ‘in’ box is brimming over 17th Aug, 2021
  • Abolition of section 106 agreements ‘threat to local prioritisation’ 5th May, 2022

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 4 hours ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 1 day ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

    Room151 5 days ago

    ‘Urgent consultation’ issued in response to continuing audit delays: CIPFA and the Local Authority Scotland Accounts Advisory Committee (LASAAC) have announced another “urgent consultation” to consider proposals to address the latest issue that has led… dlvr.it/SQJ0kV pic.twitter.com/s6vw0bnGXO

    Room151 6 days ago

    Bags of capacity – now to housing delivery: HRAs have been freed up and councils are starting to invest, but some remain cautious, writes Steve Partridge. He suggests that a minimum of £10bn of additional borrowing could be[...] dlvr.it/SQDvxk pic.twitter.com/yZmoWzHv6U

    Room151 6 days ago

    Bags of capacity – now to housing delivery room151.co.uk/treasury/bags-…

    Room151 1 week ago

    To Michael Gove: a modest proposal: Conrad Hall has written an open letter to the levelling up secretary suggesting an unusual (and tongue-in-cheek) proposal to help councils predict next year’s government grant. Dear Secretary of State,[...] dlvr.it/SQ9GpX pic.twitter.com/mSX1xgeL8a

    Room151 1 week ago

    Queen’s Speech: an ambitious plan hampered by omissions: Richard Harbord examines the impact of the government’s legislative proposals on councils, and concludes that local authorities expect and need more from central government. However you view the… dlvr.it/SQ8hmP pic.twitter.com/BsnziyNPIO

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Bonds agency on verge of first bond launch
  • Next story Scottish councils fail to explain budget variations

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.OK