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Business Breakfast LIVE: North East firms hauled before courts amid business rates struggle

34% of North Tyneside firms hauled before magistrates for business rates non-payment

A North East authority tops the UK league for issuing the most court summons to companies for failing to keep up with business rate payments.

North Tyneside Council issued summons to 34% of businesses within its jurisdiction, followed by Middlesbrough Borough Council and London’s Borough of Haringey, and Luton Borough Council which called 27% before magistrates.

The figures are unveiled in a Freddeom of Information request carried out by rents specialist CVS, which shows that 164,757 business premises in England and Wales were hauled before a magistrate in 2016/2017 after failing to pay their business rates. It means that around one in every eight businesses received a summons on those grounds from their local council, CVS said.

In the current financial year alone – counting the period from from April 1, when the controversial business rates revaluation took place, to the end of August – a total of 81,093 businesses have been summoned to court for failing to pay their business rates. CVS chief executive Mark Rigby is now calling on Chancellor Philip Hammond to freeze 2018 business rates as part of his Autumn Budget next month, saying the economic environment is already punishing struggling businesses. “Brexit is driving inflation. Import prices have risen given the fall in the pound with prices rising faster than wages, causing households to ‘tighten their belts’ on spending, especially on ‘big ticket’ items. Business investment has slowed and confidence fallen. “Against this backdrop we already have the highest property taxes not only in Europe, but the World. “The Chancellor must be bold within his upcoming Budget next month through an unprecedented stimulus of freezing rate rises in April 2018.”

Businesses in England and Wales are bracing themselves for a £1.2 billion tax hike next year, despite the staggering number of companies are being dragged to court for failing to keep up with climbing payments.

Business rates specialist CVS expects a hefty rise in business rates next year, as the September Retail Price Index (RPI) – used to determine the following year’s increase – is set to come in at 4% when official figures are released tomorrow.

It means the Government could rake in an extra £1.2bn in business rates – which are calculated based on the rateable open rental value of a premises – on top of the £23.9 billion it is expected to bring in from English businesses this year.

A spokesman for the Department for Communities and Local Government said: “Following the recent revaluation, the majority of businesses will see a fall in their rates from this year. “In addition (in) the spring Budget the Chancellor announced a £435 million package of rate relief that is now being rolled out across the country.”

Money  Business Breakfast LIVE: North East firms hauled before courts amid business rates struggle Household finance figures
Money (Image: PA)

Source : Chroniclelive

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