Thousands of businesses including hospitality businesses have been taken to court for not being able to maintain with their business rate payments.
An investigation from real estate advisory firm Altus Group revealed that almost 200,000 businesses have faced a magistrate for not paying their business rates in 2017-18, following the Chancellors re-evaluation.
Real estate advisor Altus Group revealed information from 212 councils, representing 1,302,234 of the 1,902,148 business properties liable for rates, following requests under the Freedom of Information Act. While the government set aside £3.4 billion to help businesses facing the most dramatic rate increases, this transitional relief was paid for by denying rate cuts to other firms.
Altus Group said the figures from its investigation fuelled allegations that the current business rates system was criminalising firms struggling to cope with the tax burden, as well as an increase in distress on the UK high street.
The information received showed 129,306 summons issued, equating to 9.9%, with Altus Group forecasting that the overall number is likely to have been in the region of 188,883.
When factoring in the 655,970 small businesses that were exempt and did not receive a bill, Altus Group said it meant almost one in every six commercial property received a summons to appear before a magistrate last year.
Robert Hayton, head of UK business rates at Altus Group, said: “Annual inflationary rises for the seven years prior to the revaluation pushed the tax rate from 41.4p in 2010/11 to 49.7p in 2016/17 meaning a rise of 20% in bills even before the revaluation came into effect creating financial pressures.”
“Add to the mix the current, deeply unfair, system of downward transitional relief which severely limits the amount by which bills can go down, meant many businesses ended up paying disproportionately high bills in locations where local economies were underperforming and values had fallen.”