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Stafford Borough Council writes off £205,000 'irrecoverable' business rate debts

Business rate debts worth more than £205,000 are being written off by Stafford Borough Council.

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Stafford Borough Council

The 18 debts have been deemed “irrecoverable”, along with seven cases of council tax arrears totalling more than £22,000 and a housing benefit overpayment with more than £11,000.

But the level of business rates that have been collected so far this year is higher than during the same period last year, Stafford Borough Council’s cabinet was told on Thursday. And “all reasonable and lawful attempts are made to recover all amounts due”, a report said.

Councillor Mike Smith, cabinet member for resources, told the meeting: “We’ve collected 55.4% of council tax at the end of September, which is only just lower than the 56% we collected in the same period last year. As far as business rates are concerned, we collected 55.7% by the end of September, which is well up on the 46.2% collected in the same period last year.

“We’re not quite back to where we were before the pandemic, but the figures do show an upturn in the economy since then. So the general figures are quite pleasing."

He added: “Most of the businesses that have been written off have either gone into bankruptcy or liquidation. Every effort has been made to recover these debts.

“You will see where many of the businesses have been written off, it says IVA-approved. That is an Individual Voluntary Arrangement, which is an alternative to going bankrupt, and the debtor agrees that over the next five years they will pay a set amount back of what they owe.

“Some of that money they pay goes to the agent that sets up the IVA and any that’s left goes to the creditors, but unfortunately we happen to be at the bottom of the list. If we do get any of this money back it will then be credited against these accounts, but it is much more easy to write them off at this stage because the work involved in crediting a few pounds each year is disproportionate to the money that we will get.”

The cabinet report said: “Where necessary and when Liability Orders are granted by Magistrates, the council uses its powers to make deductions from earnings and benefits of debtors, where it can, and instructs enforcement agents where such deductions are not possible or appropriate. For any of our powers to be effective we need to know the whereabouts of a debtor and this is not always the case.

“Where debtors abscond we will use all reasonable endeavours to trace them and are often successful in doing so. Unfortunately, on occasions this is not so and we must submit a debt for write off.”