Council writes off £526,000 of 'irrecoverable' business rate debts
Business rate debts worth more than half a million pounds are being written off by Stafford Borough Council, but a senior member has said collection rates are up compared to last year.
The authority’s cabinet agreed to write off 15 business rate debts deemed “irrecoverable” at its meeting on Thursday, totalling £526,494.75.
A £2,549.33 council tax debt will also be written off.
A cabinet report said: “Whilst our collection rates are traditionally good, regrettably not all of the monies owed to the council can be collected.
“Council tax is collected on behalf of the (borough) council, parish councils and our major preceptors (Staffordshire County Council and Commissioner for Police, Crime, Fire and Rescue).
"The effect of the collection fund arrangements means that Stafford Borough Council retains around 10 per cent of the council tax collected.
“Council tax due for the current year amounts to £94.9m and we would hope to collect in the region of 98 per cent within the year, as was the case prior to the Covid-19 pandemic.
"The knock-on effect of underpayments during the past two years, the current economic climate and the need for Revenues staff to have managed Council Tax Energy Rebate awards, will add to the difficulty in achieving this target in the current year.”
The report revealed that by the end of December the council had collected 82.3 per cent of council tax due for 2022/23 – down on the 83.1 per cent collected during the same period in the previous year.
Business rate collections were up however, at 81 per cent by the end of December compared to 76.5 per cent at the end of December 2021.
Councillor Mike Smith, cabinet member for resources, said: “We have collected more or less the same amount of council tax as we did this time last year, slightly down but not significantly so.
"And we have collected more of the business rates than we did this time last year; that shows a positive impact on the economy if business rates are coming in better than they did last year.”
But the report said: “The collection rate for the same period in 2019 was 83.4 per cent and so it would appear that it will take some time to return to pre-pandemic level.
"Our collection efforts are sometimes frustrated by weaknesses in legislation.
“Rates are due from the occupiers rather than the owners of property and where the occupier is a company, we can only recover from that company.
"Some proprietors will strip a company of its assets, or dissolve the company before we have had an opportunity to implement our recovery procedures.
“A new company is then formed in a similar style, to trade from the same premises.
"Central Government has previously undertaken to review the loopholes that exist in rating and company legislation, though no changes have yet been received.”
