Bailiffs sent in to collect 115,000 business rate debts in just 12 months
Ahead of the Chancellor’s
anticipated announcement of a cap on Business Rate rises, the UK’s only small
business focused debt advice charity is warning that more in depth review of
the business rate regime is required.
Research* from the Money
Advice Trust – the charity which runs Business Debtline – has found that local
authorities have referred 115,000 business rate debts to bailiffs in just 12
months. Many small businesses across the UK find that business rates can be a big
hurdle to successfully stabilising a business in its first few years of
operation and can often lead to otherwise unnecessary company insolvencies.
Joanna Elson, Chief
Executive of the Money Advice Trust, said:
“The Chancellor’s cap on
Business Rate rises should be welcomed, though many small businesses already
struggle to keep up with business rate payments in their early years, and a two
per cent rise will push more SMEs into arrears.
“There is more that could be
done to the business rates regime to help small businesses prosper. One example
of this is the current business rate relief programme, which in its current
inception extremely few small businesses are eligible for. This programme could
be used more effectively to safeguard those businesses that are likely to grow
in the coming years.
“Local authorities could
also take a longer-term approach to dealing with business rate arrears. Our
research shows that bailiffs were used 115,000 times to collect business rate
arrears in just 12 months. Having a bailiff knocking on the door of a business
can be extremely damaging. We urge local authorities to work harder to avoid
sending bailiffs to collect business rate arrears.
“There is a great incentive
for the Government to do more to support struggling small businesses. Small
businesses provide employment, help keep our high streets vibrant, and often
provide fresh ideas that can propel entire industries forward. Our Business
Debtline advisers hear from thousands of small business owners every month, who
could help drive growth in the UK economy with just a little more support.”