Bailiffs have been unleashed on almost 41,000 companies struggling to pay higher business rates since last year’s controversial revaluation, an investigation has claimed.
An estimate by Altus Group suggests English and Welsh councils have referred tens of thousands of businesses to bailiffs that were given the power to enter premises, seize goods and sell them at public auction to settle debts.
The projection is based on a Freedom of Information Request, and the figure only covers the number of referrals from April to September 2017 – the first five months when the revaluation was in force.
The Government introduced the revaluation to account for property price changes over the last seven years.
Many companies operating in London and the South East faced the biggest increases – with businesses in Hounslow seeing rateable values soar by 25.09%, and by 31.83% in Lewisham.
Those two London boroughs also had the highest referrals for debt collection, with one in 11 premises in those areas assigned bailiffs for enforcement.
Following the report, the Government has urged councils to be “proportionate in enforcement and use bailiffs only as a last resort”.
Video: Small firms ‘need a break on business rates’
Alex Probyn, president of business rates at Altus Group, said: “It isn’t only those whose values have increased that are struggling.
“The current, deeply unfair, system of transitional adjustment severely limits the amount by which bills can go down, meaning many businesses are paying disproportionately high bills in locations where local economies areunderperforming and values are falling.”
The Chancellor has responded to concerns about rising business rates bills by switching the rate used to calculate annual increases from the higher Retail Price Index measure of inflation to the lower Consumer Price Index – a change that will come into force in April.
Philip Hammond used his Budget to claim the shift would save firms £2.3bn over five years.
Image: Philip Hammond’s Autumn Budget contained a measure to trim the acceleration in business rates bills
A Government spokesman added: “Following the revaluation, the majority of businesses saw no change or a fall in their business rates liability and a £3.6bn transitional relief scheme is providing support for the minority of businesses who face increases.”
The Local Government Association, which represents the 348 councils in England and Wales which issue the bills, did not deny the report’s findings in its response.
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Claire Kober, the chairwoman of its resources board, said: “Other businesses and the services that local communities rely on will suffer if councils are unable to collect business rates owed to them.
“While councils do not set business rates, they do what they can to help businesses struggling to pay.”