Business rates loopholes costing Walsall Council £500,000 a year

By Gurdip Thandi | Walsall | News | Published: | Last Updated:

Businesses exploiting rate loopholes costs Walsall Council around £500,000 a year, finance bosses have revealed.

Walsall Council

A report was presented to Walsall Council’s scrutiny overview committee on Tuesday, which discussed business rates in the town.

Mark Fearn, project lead for the authority’s money, job and home department, spelled out how much the council loses through firms legally taking advantage of empty rate relief.

Avoidance techniques include the use of short-term occupations for six weeks or the granting of leases to charities and companies that immediately go into insolvency.

Mr Fearn said: “Nationally, there are high degree avoidance tactics in use through empty property reliefs.

“There is nothing illegal about this but we believe it is costing us around £500,000 a year.

“There have been recent court cases that have been supportive of local authorities and the Welsh and Scottish Governments have issued consultation papers on the best process to tackle such avoidance.

“At present, no consultation paper has been issued for England.”

Councillor Ian Shires


Mr Fearn added that business rates are set by HMRC and not the local authority – although there are a number of discretionary reliefs that can be offered by the council.

In 2018/19, Walsall Council collected over £73.1 million in business rates. This represented a collection rate of 98.2 per cent – the highest for the authority in five years.

Committee members were also told that local authorities are becoming more reliant on business rate money to fund services, in the wake of huge reductions in Government grant funding.

Councillor Ian Shires said: “Business rates are being cited as a reasons for why firms are struggling and it is us who are seen as the bad guys.

“By 2020, we will have had around £200 million taken from our budgets (since 2010) while the demand for services have gone up and up.

“The government are not telling the people out there what they are doing to our funding and it is the poor residents and businesses that can’t escape because their properties have a value.”

Gurdip Thandi

By Gurdip Thandi

Local Democracy Reporter covering Walsall.


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