Local authorities have begun to take legal action against businesses that fail to pay their business rates bills.
A new report from property consultancy Colliers has shown that an increasing number of businesses have begun to receive letters demanding payment and/or a court summons.
In response, many businesses have started to appeal their business rates assessments on the grounds of a Material Change of Circumstance (MCC) to their business operations as a result of the Coronavirus crisis.
Data shows that around 183,000 businesses began the appeal process in the six months between 1 April and 30 September 2020. That is equivalent to 1,000 appeals per day.
John Webber, Head of Business Rates at Colliers, said: “It is ironic that the Government is preventing private landlords from taking recovery action against tenants not paying rent, while at the same time turning a blind eye to billing authorities acting on recovery action as if COVID-19 didn’t exist!”
Although businesses operating in the retail and leisure sectors were granted a business rates holiday during lockdown, office occupiers and some other businesses have not been given the same support.
John Webber added: “We appealed to the Government to introduce a business rates holiday for the period of lockdown and to introduce some reliefs for the disruption to businesses seen since.
“In the meantime, we have been negotiating on our client’s behalf with local billing authorities requesting them to show leniency to businesses that are struggling to pay their bills. We are finding that attitudes vary greatly depending on where businesses are based and the attitudes of the individual billing authority.
“There is a total lack of consistency – some clients for example with properties across boundaries find they are granted reliefs for some of their properties by certain local billing authorities but not from others.
“And recently there has certainly been a step-up of enforcement activity via the courts. We believe we’ll see more court summonses and enforcements as we go forward.”
If you or a client is concerned about business rate arrears and the impact it may have on their business then it is important that they seek professional legal advice at the earliest opportunity. To find out how our insolvency experts can help, please contact us.